Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

Oral Answers to Questions — FOREIGN AND COMMONWEALTH AFFAIRS

Neutron Bomb

Mr. Hugh Jenkins: asked the Secretary of State for Foreign and Commonwealth Affairs if, in view of President Carters decision to defer development of the neutron bomb, he will make it his policy that in no circumstances will Great Britain consent to the storing or deployment of neutron bombs in Great Britain.

The Secretary of State for Foreign and Commonwealth Affairs (Dr. David Owen): President Carter has made it clear that his ultimate decision will depend on how the Russians respond to his call for them to show restraint in their arms programmes and force deployments. The Government support this position. No question of storing or deploying the neutron bomb therefore arises at this time.

Mr. Jenkins: I am glad to hear that from the Secretary of State. I am sure that many of us on the Government Benches will agree that he should be encouraged to continue to resist the pressure put upon him by the Opposition to agree to the development of this nuclear weapon—a weapon which would have only disastrous consequences, resulting in national suicide and a possible end to European civilisation. Although President Carter has said that the Soviet decision not to proceed with the neutron bomb is not a matter of significance, does not my right hon. Friend recognise that if the Soviet Union, depressed by this response, were to decide to develop the neutron bomb, both he and the President would regard it as a matter of considerable significance? In view of that, will my

right hon. Friend welcome the Soviet decision now?

Dr. Owen: I do not hold the same view as my hon. Friend about the significance of the neutron bomb. I believe that it is a development of an existing weapons system. I think that it was a balanced judgment and a right judgment not to deploy it at present, because the Soviet Union had attached a great deal of importance to it. Much of this, I believe, was propaganda, but the fact that the Russians had attached importance to it meant that we had to take it into account in creating the right climate for disarmament this year with the United Nations' Special Session. I am hopeful that it will contribute to improving the climate for disarmament.

Mr. Speaker: I must appeal to hon. Members not to ask long supplementary questions.

Mr. Pattie: Does not the Secretary of State think it odd that his hon. Friends who are campaigning against the neutron bomb are campaigning against a smaller, cleaner nuclear weapon? Therefore, may we infer that they are in favour of bigger and dirtier weapons? Will the Foreign Secretary confirm that the neutron bomb is, in fact, an anti-tank weapon, and that there is therefore no question of its ever being deployed in the United Kingdom?

Dr. Owen: It is true that the main military argument for deploying the neutron bomb is that it would deter a concentration of tanks. That is the main significance of the military argument. I think that the arguments about clean and dirty bombs are very difficult. None of us wants to see nuclear weapons deployed, ever but we must recognise that this is part of our system of deterrents, and, while it is, we must look at the modernisation of the weapons system. At this moment I believe that both qualitatively and quantitatively any increases in nuclear weapons should be avoided.

Mr. George Rodgers: Does my right hon. Friend agree that possession of a neutron bomb, by its very nature, would imply that we were committed to first use of nuclear weapons in the event of conflict? Is this not a horrifying prospect, and will he bear it in mind in future discussions?

Dr. Owen: My hon. Friend has put his finger on the main argument against the neutron bomb, which is the question whether it would reduce the nuclear threshold. That is a serious argument. A lot of what is being said about the actual technical arrangements of the bomb is not so serious. Personally, I think that the whole question of first use of nuclear weapons is a very delicate decision, which could only ever be taken under strict political control.

Mrs. Winifred Ewing: Will the Secretary of State condemn the action of France in going ahead with the neutron bomb? Is he prepared to make a clear condemnation today?

Dr. Owen: As I understand it, the French have categorically denied that they have let off a neutron bomb, or that they have any intention of so doing.

Mr. John Davies: Will the Foreign Secretary say whether he thinks that the European Powers have adequately expressed their views to the United States on this major subject? Bearing in mind that, as has been said, the neutron bomb represents a potentially very important defence weapon against an overwhelming build-up of conventional armaments by the Soviet Union on the central European front, which directly affects the interests of Europeans, have he and his colleagues in Europe adequately briefed the United States on their views?

Dr. Owen: There was the closest consultation on this, and over quite a long period of months. The final decision was taken by the President, as was inevitably right, and I think that in taking that decision he was influenced by the feeling that there was a more optimistic climate for disarmament measures. I share that optimism. I believe that 1978 will see a SALT II agreement and a comprehensive test ban agreement, and I am also hopeful that we shall have progress in the MBFR talks in Vienna.

Africa (Soviet and Cuban Presence)

Mr. Rifkind: asked the Secretary of State for Foreign and Commonwealth Affairs whether he will now raise at the United Nations the continuing presence of Soviet and Cuban military personnel in Angola and Ethiopia as a potential threat to world peace.

Mr. William Shelton: asked the Secretary of State for Foreign and Commonwealth Affairs if he will raise in the Security Council of the United Nations as a threat to world peace the presence of Russian and Cuban troops in the Horn of Africa and the continuing fighting betwen Ethiopia and Eritrea.

Dr. Owen: The Government have made clear their concern at the scale and nature of Soviet and Cuban military involvement in Africa and share the view of the OAU that disputes within Africa should be settled by African States themselves. We have made it clear that we believe the Security Council could play a helpful role provided there were sufficient international backing to make it effective.

Mr. Rifkind: Does the Foreign Secretary seriously doubt that if 17,000 British or American troops had been in Angola or Ethiopia the matter would have been raised in the United Nations months ago as a threat to world peace? Does he accept that brave speeches at banquets at the Mansion House are no justification for not raising the matter at the United Nations, where it really makes a difference? What has to happen before the present British Government will raise this matter in the Security Council?

Dr. Owen: A sovereign country is entitled to ask others in to defend its borders. I think, therefore, that we have to make a distinction between the presence of Cubans in Ethiopia, in relation to Somalia, and any involvement of the Cubans in the internal issues of Ethiopia involved in Eritrea. In that case I have made my views very clear—that I think it would be totally unjustified. But it is a very dangerous precedent to establish that no sovereign nation can invite in troops from outside. That is something that we would not wish to hold.

Mr. Litterick: Is the Foreign Secretary aware that at a recent meeting held in this building with an all-party group of Members and the Cuban Ambassador, the ambassador made it clear to the Members present that should Ethiopian troops set foot outside the territory of Ethiopia, Cuba would withdraw all military personnel from Ethiopia, just as Cuba did from Somalia when Somalian troops invaded Ethiopia?

Dr. Owen: I have received that assurance, and I am grateful that there has been no major territorial incursion across the Somalia-Ethiopia border, but the Cubans have got to recognise that hitherto they have been supporting the Eritrean freedom fighters and that it would be a major change of policy if they were now suddenly to involve themselves in military disputes. I detect that they are having discussions with the Eritreans—I note that it has been reported in Havana—and I hope that they will use their influence to mediate to get a negotiated settlement.

Mr. Blaker: Having just returned from Namibia, may I put to the Secretary of State a question which arises out of the presence of the Soviet and Cuban forces in Angola? Now that the South African Government have accepted the Western plan for Namibia, will the Western Powers be pressing the Soviet Union to use its undoubted influence with SWAPO, which operates from Angolan bases, so that SWAPO will also accept the Western plan and renounce its policy of intimidation by assassination?

Dr. Owen: I welcome the South African decision, and I hope that it is followed by SWAPO. It is fair to say that Angola has, throughout, played a constructive role in the discussions. It obviously made no secret of the fact that it supports SWAPO, but it has indicated that it would like a negotiated settlement, and that is hopeful.

Mr. Grocott: Faced, however, as he is, with increasingly bellicose noises from the Opposition about the presence of Soviet troops in various countries, does my right hon. Friend ever receive any concrete suggestions from the Opposition Front Bench on how those troops should be removed?

Dr. Owen: It is important to keep the whole question in proportion. I am very worried about the effects of Soviet troops in Africa and the ability to switch the balance of power in Africa very rapidly, as happened in the Horn of Africa. On the other hand, we have to recognise that they have the right to be in Africa, as we do. What I object to is that the Soviet influence in Africa, as in other parts of the world, is not devoted to the welfare of the citizens through development aid and through humanitarian help, but a large portion of their financial effort and backing is made through military supplies.

Mr. Luce: Whilst fully supporting the Foreign Secretary's speech at the Mansion House, in which he condemned the destructive Soviet and Cuban military intervention in Africa, may I say to him that it is deeds rather than words that will carry credibility with the Soviet Union? Will he now tell the House, particularly in the light of President Brezhnev's speech recently, in which he said that Soviet military intervention in Africa would be stepped up, what action the British Government propose to take to expose at the United Nations the nature of the Soviet and Cuban threat to international peace in the Horn of Africa and in other parts of Africa?

Dr. Owen: One can go to the United Nations but, as the hon. Gentleman knows, there is very little point in going to the Security Council—which is what we envisaged over the Ethiopian and Somalian dispute—if that means having the whole of the African group against us. The OAU has played a useful and important role in mediating between Ethiopia and Somalia. We have to get this whole question in proportion. Our best way of combating Soviet influence in Africa is not to put ourselves in the wrong, and not to do what a lot of Opposition Members wanted me to do, which was to support Somalia when it put its troops into the Ogaden.

China

Mr. Michael Spicer: asked the Secretary of State for Foreign and Commonwealth Affairs whether he has any plans to meet the Chinese Foreign Minister.

Mr. MacFarquhar: asked the Secretary of State for Foreign and Commonwealth Affairs if he will seek to pay a visit to China.

Dr. Owen: I have renewed my predecessor's invitation to the Chinese Foreign Minister to visit the United Kingdom. I also myself hope to visit China before too long. Our relations with China are increasingly important and substantial.

Mr. Spicer: In view of the fact that the Republic of China is one of the few countries that is currently taking seriously the international military threat posed by the Soviet Union, have the Government


given any consideration to an anti-Soviet defence pact with the Chinese?

Dr. Owen: The question of a defence pact does not arise. The Chief of Defence Staff will pay an official visit to China from 27th April to 3rd May. This will be the first visit of a United Kingdom Chief of Defence Staff to China. The purpose of the visit is to have a broad exchange of views on defence matters, and I welcome it.

Mr. MacFarquhar: Before my right hon. Friend meets the Chinese Foreign Minister, will be undertake to investigate the possibility of presenting proposals to him for a cultural agreement, perhaps on the lines of that between France and China, which would regularise the very welcome exchanges between this country and Peking? Will he also undertake, before that meeting, to talk to representatives of the Sinological community in this country, such as the British Association for Chinese Studies, to make sure that those people in particular get the most out of any such agreement?

Dr. Owen: I shall certainly look sympathetically at the suggestions that my hon. Friend has made. It is my intention to improve our relations with China. They have been steadily improving, and there is room for more improvement, for greater commercial exchange, and for greater cultural, scientific and technological exchange. I wish to deepen our relations with that very important country.

Mr. Aitken: In view of China's close geographical and diplomatic links with Pakistan, will the Foreign Secretary consider organising a diplomatic initiative to ensure that the former Pakistan Prime Minister, Mr. Bhutto, gets a fair trial and is also given more humane treatment than would appear to be the case at present?

Dr. Owen: I congratulate the hon. Gentleman on his ingenuity. The House knows that I have had discussions about this issue with the President of Pakistan's foreign affairs adviser. I think that at present the question is under appeal.

Mr. Norman Atkinson: Will the Foreign Secretary now give an assurance that although he will do everything possible to improve our relationships with China, it will not be at the expense of our relationship with the Soviet Union?

Dr. Owen: My hon. Friend asks a serious question. It is not in the interests of this country to make such a dramatic shift in our policy that would alienate the second most powerful country in the world. However, I do not think that the Soviet Union would have any standing in intervening in our willingness to improve our relationship with China. We shall make our decisions on that relationship on their merits and on what is in the best interests of Britain.

Mr. Welsh: What steps is the right hon. Gentleman taking to encourage contacts and understanding between the United Kingdom and China outside Government level? Is he aware of the threatened cut-backs in Chinese and Asian studies at Scots universities? Will he encourage his colleagues in the Department of Education and Science to provide funds to ensure that these important studies are maintained?

Dr. Owen: I shall consider that. There was a long tradition of Chinese expertise in Britain which may well have tended to dwindle in recent years. It is important to ensure that it is built up. My hon. Friend the Member for Belper (Mr. MacFarquhar) is a distinguished example of someone who understands and knows China extremely well.

Middle East

Mr. Walters: asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on Her Majesty's Government's attitude on progress towards peace in the Middle East.

The Minister of State, Foreign and Commonwealth Office (Mr. Frank Judd): I have nothing to add to the reply my right hon. Friend gave the hon. Gentleman on 22nd March.

Mr. Walters: As the present contacts between the United States Government and the Governments in the area do not appear to be making satisfactory progress, does the Foreign Secretary consider that this might be an opportune time for the European Community to bring forward an initiative aimed at bringing the negotiations back into the international arena? Will the hon. Gentleman take the opportunity to confirm what is now generally agreed, namely, that it is essential, in order to have a


settlement, that Palestinian rights should be recognised?

Mr. Judd: Heads of Government and Foreign Secretaries discussed this matter during the recent meeting of the European Council. After that meeting the Presidency gave a full account of the discussion to the Egyptians and others. The Egyptians expressed themselves as well satisfied with that which had taken place. Of course, we recognise that the interests and needs of the Palestinians are factors that have to be taken into account if we are to get a lasting settlement.

Mr. Roy Hughes: What contribution to peace in the Middle East was the Israeli invasion of the Lebanon, bearing in mind that several thousand people were killed and over 200,000 were made refugees? Would it not seem to indicate that Menachem Begin, the Israeli Prime Minister, is as great a terrorist now as ever he was?

Mr. Judd: Anyone with an ounce of compassion must be concerned about the suffering that preceded it. We, together with other members of the Nine, have called upon the Israelis to withdraw from South Lebanon in accordance with the resolutions passed at the United Nations.

Mr. Michael Latham: Why should Israel be required to rely upon great-Power territorial guarantees? What use are those guarantees to Israel, compared with secure and defensible frontiers?

Mr. Judd: The only lasting and effective solution to the dispute between the Arabs and Israel will be found by the Arabs and Israelis working together and committing themselves to guaranteeing the future effectively.

Mr. Raphael Tuck: Am I not right in thinking that neither the West Bank nor the Gaza Strip is the recognised territory of any sovereign State but that both are part of the Palestine Mandate, an international trust, and, therefore, subject to negotiations as anticipated by Resolution 242, which requires changes to provide secure and recognised borders?

Mr. Judd: Resolution 242 requires secure borders but also calls upon Israel to be prepared to withdraw on all three fronts.

Mr. David Watkins: asked the Secretary of State for Foreign and Commonwealth Affairs if he will raise at the United Nations Security Council as a threat to peace in the Middle East the continued presence of Israeli troops in Southern Lebanon.

Mr. Judd: No, Sir.

Mr. Watkins: In that case, will my hon. Friend take the opportunity to press the United Nations for action to ensure the return to their homes with full compensation of the 200,000 refugees created by this Israeli military operation, bearing in mind that that would set no precedent since this would be entirely in line with United Nations resolutions in regard to refugees in this part of the world for 30 years, although none of them has ever been implemented?

Mr. Judd: The humanitarian problems facing refugees in this area must be a major consideration for us all. But the first priority, to which we are all committed to find a solution, is to re-establish peace and security on that frontier.

Mr. Henderson: Does the Minister feel that it would be appropriate at this stage to remind the House of the provocation that Israel suffered, which led to the incursion into Lebanon? Does he also feel that it would be useful if those who are pressing this matter today were to call for these States to recognise Israel as a State and to give guarantees that there will be no future incursions of a terrorist nature across Israel's borders?

Mr. Judd: No one can condone the terrorist activity that preceded the invasion of South Lebanon. Indeed, this Government have made plain how disgusted they were by the whole episode. If we wish to find a lasting solution in the Middle East, a willingness by the Arab States to recognise Israel's right to existence and to guarantee it would help forward that solution, without doubt.

Mr. Hooley: Does my hon. Friend agree that perhaps there is a prior right of recognition of the Palestinians, whose land has been stolen.

Mr. Judd: I have already said, in answer to a previous question, that the


legitimate rights and interests of the Palestinian people are factors which have to be taken into account if we are to find a lasting solution.

Mr. Rifkind: Further to the question posed by the hon. Member for Aberdeen-shire, East (Mr. Henderson), does the Minister agree that the demand for an evacuation of Israeli troops from Southern Lebanon would become unanswerable only if there were sufficient guarantees that such an evacuation would not lead to a renewal of terrorist incursions into Israeli villages?

Mr. Judd: I agree that the greater the speed with which the United Nations interim force in Lebanon can be put in place with the resources at its disposal to make its work effective, the more convincing will be the case that there will be no threat or danger to security in that area.

Mr. Litterick: Does the Minister agree that, given the persistence and the threat of war in the Middle East during the last 30 years and the present wretched situation in the Eastern Mediterranean, the policy followed by the United States, the USSR, France and the United Kingdom of supplying large quantities of armaments to every nation State in the Middle East has proved to be a disastrous failure for the peoples of the Middle East and that the United Kingdom is in duty bound to take some initiative to put an end to this murderous traffic?

Mr. Judd: I certainly agree with my hon. Friend that any nation which exports or sells arms to any part of the world must take fully into account the political considerations of such activity and whether it is likely to lead to greater prospects of peace and stability or to disrupt the prospects of stability in particular areas.

World Commodities Centre

Mrs. Chalker: asked the Secretary of State for Foreign and Commonwealth Affairs, in view of the economic importance to the United Kingdom of the presence in London of the headquarters of international commodity organisations, when he will state his decision on sponsorship of the establishment in London of a world commodities centre, so that the organisation already in the United King

dom will have a clear picture of how to deal with its present accommodation problems, and also so that other new commodity organisations, such as copper, will have inducement to establish their headquarters in London in the future.

The Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Evan Luard): My right hon. Friend received the executive heads of the London-based commodity organisations last month, when they presented him with a useful memorandum setting out their difficulties. He has instructed his officials to work on this question urgently. Ministers will be meeting to consider the matter when the necessary preliminary study has taken place.

Mrs. Chalker: I declare an interest, Mr. Speaker. Is the hon. Gentleman aware that other European Governments are actively encouraging likely new commodity organisations to set up in their capitals? Further, is he aware that we shall have to offer real incentives to persuade such organisations to come to Great Britain and to sort themselves out in a beneficial way to the British economy?

Mr. Luard: We are very much aware that other countries are anxious to attract these organisations to their capitals. That is one of the reasons why we have taken the proposal seriously. I agree that it is an important and imaginative idea. That is why we have been having discussions with the heads of the organisations. That is also why my right hon. Friend has seen the heads of the organisations, and why we hope to be able to reach a conclusion shortly.

Mr. Ioan Evans: Is my hon. Friend aware that the Parliamentary Association for World Government, which is an all-party group, has been encouraging the project? Is he further aware that there is a need for urgency? Does he agree that it would be a great thing if a world commodity trade centre were set up in London, which would lead to international co-operation and bring great economic benefit to Britain?

Mr. Luard: I am aware of the association's interest in this matter. I was involved in it myself at an earlier stage. One of the proposals is precisely to establish a single world commodity centre in


this country. That is one of the matters that we are discussing with the commodity organisations.

Mr. Crawford: If such a centre were to be established, would not Aberdeen be a better place for it than London?

Mr. Luard: One of our assets—this answers precisely the supplementary question raised by the hon. Member for Wallasey (Mrs. Chalker)—is that London is an extremely attractive centre for these organisations, for various reasons. London happens to be an important commercial centre and a centre for commodity markets. I do not think that Aberdeen can provide a suitable alternative.

Mr. Henderson: Rubbish.

Mr. John Davies: I support the request of my hon. Friend the Member for Wallasey (Mrs. Chalker). I add that an early intervention may be necessary, bearing in mind that our past experience of giving great and deep thought to these matters over a protracted period has sometimes landed us without the baby that we wanted to get. Does the hon. Gentleman recall the problems that we had with the European Patent Organisation and our regrets that ensued from our rather late entry into the discussions?

Mr. Luard: We are well aware of the urgency. I think that the House will agree that we have treated the matter with some urgency. It is only a few weeks ago that the commodity organisations presented their proposal to us. We have a specific, concrete proposal, which we are considering as urgently as we can.

Hong Kong (Corruption Charges)

Mr. Terry Walker: asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement about the latest charges of corruption in Hong Kong.

Mr. Luard: On 7th April 20 serving Hong Kong police officers, four retired police officers and two Customs and Excise inspectors received summonses to appear in court on corruption charges. The Hong Kong Government remain determined to eradicate corruption from the territory. In this they have the full support of Her Majesty's Government.

Mr. Walker: Does my hon. Friend appreciate that the whole status and

credibility of Hong Kong is undermined by these charges of corruption, especially when they concern police officers? Will he ask my right hon. Friend to have talks urgently with the Hong Kong Government to ensure that we get to the bottom of the corruption in Hong Kong?

Mr. Luard: I entirely agree that this is a major and serious problem. I assure my hon. Friend that we are in continuous contact with the Hong Kong Government on the matter. He may be interested to know that there have been 260 prosecutions and 130 convictions of police officers on corruption charges since the Independent Commission against Corruption was established three or four years ago.

Sir P. Bryan: Does the hon. Gentleman agree that the commission has had a dramatic effect on corruption in general, and especially on syndicated corruption?

Mr. Luard: I believe that the commission believes that it has largely eradicated large-scale syndicated corruption of the sort to which the hon. Gentleman refers. I agree with the hon. Gentleman. I think that there has been a significant change in Hong Kong as a result of the commission's activities. It would be an incredible task for it totally to eradicate corruption in a place such as Hong Kong, but there has been substantial progress over the past three years or four years.

Mr. Hal Miller: asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the recent dismissals from the Royal Hong Kong Police, and on the present state of morale of that force.

Mr. Luard: Notices of compulsory retirement under Colonial Regulation 55 were served on 118 officers of the Royal Hong Kong Police force on 7th April 1978. The force reacted calmly to this action, and continues to carry out its duties effectively.

Mr. Miller: Will the Minister confirm that since those events there has been a very welcome reduction in the crime rate and an increase in the confidence of the public in the Hong Kong police force? Further, will he tell the House what recommendations the Home Office police team in the colony has made and what is being done to give effect to them to


increase the administrative back-up for the force?

Mr. Luard: I confirm that generally the situation in Hong Kong regarding the police and public support for the police are very satisfactory at the present time. I think that recent actions have helped to bring about that situation.
The report of the police team is not yet available. One of the objects of sending out that team was to help to restore morale within the police and to help generally in the improved organisation of the police force in Hong Kong.

Mr. Ronald Atkins: Is the inadequacy of the Hong Kong police force a reason why child labour continues to be employed on a large scale and why so many sweat shops continue to exist in Hong Kong?

Mr. Luard: I think that my hon. Friend knows that the regulations governing the employment of child labour and other conditions of work in Hong Kong have been progressively and dramatically improved in the last year or so.

Gibraltar

Mr. Albert Roberts: asked the Secretary of State for Foreign and Commonwealth Affairs if any progress has been achieved during the recent discussions between Her Majesty's Government and the Government of Spain concerning Gibraltar and the outstanding differences between the two countries.

Mr. Judd: My right hon. Friend has nothing to add to the report on his meeting with the Spanish Foreign Minister on 15th March which he gave to the hon. Member for Rutland and Stamford (Mr. Lewis) on 22nd March.

Mr. Roberts: Does my hon. Friend realise that we understand the strategic value of Gibraltar? Does he appreciate that this sordid business has gone on since 1704—over 250 years ago? Does he further realise that the true indigenous people of Gibraltar are Spaniards? Does he agree that it is high time that we came to an amicable arrangement?

Mr. Judd: Our basic position remains unchanged. Naturally we want to see the best possible relationships between Gibraltar and Spain, but as a Government we are not prepared to envisage any

developments which will not be endorsed by and are not acceptable to the people of Gibraltar.

Mr. Farr: Will the Minister confirm the last point that he made, namely, that no change whatsoever in the status of Gibraltar can take place without the wholehearted and total support of the people of Gibraltar?

Mr. Judd: Our position is as it has always been. We are not prepared to envisage any changes which are not acceptable to the people of Gibraltar.

Moscow

Mr. Greville Janner: asked the Secretary of State for Foreign and Commonwealth Affairs whether he will seek to pay an official visit to Moscow.

Mr. Luard: My right hon. Friend has no present plans to do so.

Mr. Janner: As my right hon. Friend is not planning to go to Moscow at the moment, will he now protest at the continued imprisonment of members of the Moscow-Helsinki monitoring committee? In particular, can he tell the House anything of the fate of Anatole Shcharansky, who has been held incommunicado for over 12 months?

Mr. Luard: My right hon. Friend and the Government generally have made known their concern on these questions many times in this House and on other occasions. During the Belgrade conference there was prolonged discussion about matters of this kind. We are well aware of the situation of Mr. Shcharansky, and opportunity is taken on appropriate occasions to make known our concern.

Mr. Boscawen: In view of the fact that 4 million or 5 million individuals inside the Soviet Union can and do listen regularly to the BBC, will the Minister ensure that, within the resources available for overseas broadcasts, greater priority is given to the size of transmitters and other facilities for the BBC to continue its transmissions there?

Mr. Luard: I agree that the facilities and transmitters available to the BBC's overseas broadcasts are matters of considerable concern to us. These matters were commented on in the CPRS report about overseas representation. I assure


the hon. Gentleman that discussions are going on with a view to improving those facilities.

Mr. Heffer: Will my hon. Friend ask the Secretary of State, when he goes to Moscow on some future occasion, to tell the Russian Government that many Labour Members want peace, friendship, detente and the best possible relations with the Soviet Union but that it is impossible for us to understand why ordinary working peole who want to create free and independent trade unions, separate from the State—free in the sense that we understand trade unions—are sometimes put in mental institutions and arrested for trying to do something which in this country and in most countries in Western Europe is accepted as normal procedure?

Mr. Luard: I fully agree with my hon. Friend. I hope that the Soviet Government will take note of the views that he has expressed today and on previous occasions in the House on this question. The use of mental institutions as a means of imprisoning or keeping out of action people who express their own opinions, and, above all, people who simply try to perform the task of trade union leaders, is totally unacceptable to us in this House. I know that my right hon. Friend has heard what my hon. Friend said and will take account of it.

Rhodesia

Mr. Kenneth Lewis: asked the Secretary of State for Foreign and Commonwealth Affairs what progress has been made in discussions with the United States Government on securing agreement on policy on Rhodesia.

Dr. Owen: Mr. Vance and I spent several days together in Africa recently and had further discussions this week. We are in complete agreement concerning our joint policy towards Rhodesia and will continue to work closely together in our efforts to achieve a negotiated settlement.

Mr. Lewis: As one who previously did not oppose sanctions against Rhodesia, may I ask the Foreign Secretary whether he thinks it is time for himself and the Government to take an initiative at the United Nations to get sanctions removed against Rhodesia in order to give sup

port to the now multi-racial Government there, especially in view of the fact that there is need for a counterbalance against the forces surrounding Rhodesia?

Dr. Owen: I recognise the hon. Gentleman's stand on this issue, but I do not think that it would be wise to take the course he suggests. Apart from anything else, it would not be accepted by the other member States. Furthermore, I do not think that it would be justified on its merits. I believe that that issue would have to be faced, as I have already said to the House, if we were satisfied that the Fifth Principle had been carried out, if there had been a transfer of power, and if a new Government had been elected and independence established. In those circumstances we would have to decide whether to recognise and whether to lift sanctions.

Several Hon. Members: rose—

Mr. Speaker: Order. Despite the time, I intend to call one more hon. Member from the Government side and then the Opposition Front Bench speaker, and I shall add the time taken by them to the end of Question Time.

Mr. Newens: Does my right hon. Friend agree that the internal settlement was brought about by the Smith regime only as a result of pressure brought to bear by the Patriotic Front? Would it not be a recipe for continuing war and disaster in Southern Africa if we were to withdraw sanctions or go any way towards recognition of that so-called internal settlement?

Dr. Owen: I have no doubt that there have been a number of pressures which have brought about the movement that has taken place—in which, I regret, the need for armed fighting and a continuation of such fighting has been a factor. But I do not think this House should underestimate the effects of United Nations sanctions. I believe that after a period of 12 years they, too, have begun to bite.
I agree with my hon. Friend that we should pursue a negotiated settlement, and I believe that it is possible to achieve this on the basis of a United Nations presence, a neutral administration and fair and free elections. What has happened in the last day or so in Namibia gives me some ground for thinking that


we may be able to achieve the same sort of agreement in Rhodesia.

Mr. John Davies: I applaud the efforts of the right hon. Gentleman and the United States Secretary of State, Mr. Vance, to secure a peaceful solution in Rhodesia. However, does the right hon. Gentleman not realise that his persistent commitment to the Anglo-American plan is bound to undermine the potential fruition of the settlement reached between Mr. Smith and the three black leaders? Will he please now give some kind of support to ensuring that that which represents at present by far the most likely system to bring peace to that country will be carried forward with help and not with hindrance?

Dr. Owen: It is not my job to hinder anybody. My job is to try to seek a wider measure of agreement. One way of achieving that agreement is to bring about a cease fire. I keep coming back to the issue of a ceasefire because that is the crucial element that is missing in the internal settlement. That requires the participation of all the nationalist leaders in negotiations. Without it, I believe that there will be continued conflict and that it will be very much harder to hold fair and free elections, harder to get international acceptance, and certainly harder for Zimbabwe to become a prosperous independent country.

Oral Answers to Questions — EUROPEAN COMMUNITY

Council of Ministers

Mr. Skinner: asked the Secretary of State for Foreign and Commonwealth Affairs when he next expects to meet his EEC colleagues; and if he will make a statement.

Mr. Alan Lee Williams: asked the Secretary of State for Foreign and Commonwealth Affairs when he expects the next meeting of the EEC Foreign Ministers Council to take place.

Mr. Spearing: asked the Secretary of State for Foreign and Commonwealth Affairs when he next expects to attend a meeting of the Council of the EEC.

Dr. Owen: The next EEC Foreign Affairs Council meeting will be in Brussels on 2nd May.

Mr. Skinner: Will my right hon. Friend tell the Common Market leaders in this run-up period to these "phoney" direct elections, which are supposed to take place next year, that there is another softening-up process beginning in the use of slush fund moneys in the Common Market to attract political activists and rank-and-file members from all political parties in this country with the offer of free holidays to the Common Market on supposed fact-finding visits? Is it not remarkable that among all the talk of economy in this country there is never any shortage of money for Common Market brainwashing?

Dr. Owen: I hope that my hon. Friend will accept one of the invitations that have been sent out. If he has not had an invitation, I shall try to exercise whatever influence I have.

Mr. Skinner: Some people have integrity.

Dr. Owen: These are meant to be informational visits.

Mr. Skinner: I am not going on the "gravy train."

Dr. Owen: It is an opportunity for a two-way exchange of views. If my hon. Friend, with his well-known views, goes to the EEC, he may win some converts.

Mr. Williams: Will my right hon. Friend confirm whether, at the next political co-operation meeting or a subsequent meeting, consideration will be given to co-ordination of European policy in respect of the worrying situation in the Horn of Africa?

Dr. Owen: Yes, Sir; this matter is discussed in political co-operation meetings. There has recently been a tendency to hold political co-operation meetings, if not formally at least informally, at every meeting of the Council of Foreign Ministers. This is a welcome development. The subject has been discussed in the past, and I am sure that it will be discussed fairly soon.

Mr. Spearing: In view of the increasing importance of world trade, may I ask my right hon. Friend whether, when he next meets his colleagues in the Council of Ministers, he will tell them that there are an increasing number of people in this country who view the EEC's world trading


practices as similar to those adopted by the European trading States before 1914, particularly in dumping surpluses of grain, sugar and milk products irresponsibly on the world market? Does he agree that these practices are not international in the sense in which that word has always been understood in this House and in this country?

Dr. Owen: Our general aim on the common agricultural policy is progressively to reduce real support prices in respect of those needed by efficient producers to bring about a better balance of supply and demand. We would like to see an even tougher approach than the Commission has proposed for products in structural surplus, particularly milk.

Mrs. Winifred Ewing: Will the right hon. Gentleman give the House an assurance that in any fishing negotiations with third countries the 50 miles around our shores will not be used as a bargaining tool?

Dr. Owen: The hon. Lady can be assured that we will uphold the interests of the fishing industry. We have never seen fit to trade this off in relation to any other EEC issues. We have treated the matter on its merits and have held to our position. We shall continue to do so.

Sir D. Walker-Smith: Will the right hon. Gentleman use the occasion of this meeting to seek to secure from the Council of Ministers positive and unanimous action to secure provision, in the renegotiation of the Lomé Convention, of a condition making the receipt of economic aid conditional on the observance of the fundamental human rights enshrined in articles 3 to 14 of the Universal Declaration of Human Rights?

Dr. Owen: I have long made clear to the House that that is the objective of Her Majesty's Government. We may have some difficulty in persuading all our Community partners, but it is an anomalous situation, to say the least, and very disadvantageous for the Community that there is no legal way to end aid to a country that may have committed flagrant abuses of human rights. All we are saying is that if the Community were to act in unanimity, it should be able to review a commitment entered into under the Convention. That should be one of the objectives in the renegotiation of the Lomé Convention.

Mr. Fernyhough: When my right hon. Friend attends this meeting, will he remind his European colleagues that since we joined the EEC our trade deficit has grown to over £10,000 million, which is equivalent to what we have had to borrow from the World Bank? Is it not time that the Community began to live up to what its members told us would happen to our economy if only we joined?

Dr. Owen: We are concerned at the relative contribution that we pay in comparison with other Community countries, particularly when taken against our relative wealth. One way of achieving this is to improve our own competitiveness and sell more. We need to examine some of the financial arrangements that bear very heavily on this country.

Mr. Hurd: Will the right hon. Gentleman say something about the Community's attitude on Turkey, which is now becoming increasingly important? In particular, what is the view of Her Majesty's Government and our partners about the supply of arms to Turkey by the United States and her European allies, including ourselves?

Dr. Owen: Turkey is a member of NATO and as such has to be considered in a special category, but I think that there are concerns—this has certainly influenced arms policy—that Turkey has had difficult relations with another associate in NATO, and in particular there is the problem of Cyprus. I think that we should take these issues on their merits. We should look at Turkey as a member of the Alliance and consider what are its genuine defence needs as a part of that Alliance. Too great a linkage of these issues would be dangerous, but I am not saying that we can totally ignore some of these other political factors.

Middle East

Mr. Hicks: asked the Secretary of State for Foreign and Commonwealth Affairs what recent consultations he has had with fellow Foreign Ministers in the member States of the EEC about the Middle East.

Dr. Owen: I am in regular contact with my colleagues of the Nine about developments in the Middle East.

Mr. Hicks: In view of the contacts that European leaders had with the Governments of the Arab States and Isreal following the recent European Summit, and the difficulties that the American efforts appear to be running into at the present time, will the Foreign Secretary reconsider the statement made by the Minister of State earlier this afternoon that the time is not appropriate for a major European initiative in order to bring the whole subject back into the international arena?

Dr. Owen: I do not think that it is the right time for a major initiative. I think that the dust needs to settle and that people need to consider carefully what compromise they think is necessary in the present situation. There is no case for an initiative at this moment. There is a case for serious thought about the consequences of not entering into serious negotiations.

Mrs. Jeger: Will my right hon. Friend say a little more about consultations with EEC colleagues concerning Cyprus, particularly in view of the fact that both Greece and Turkey are anxious to come closer to the Community? Surely this is a major matter that should be discussed among EEC members.

Dr. Owen: It is discussed, and I do not rule out the possibility that we shall feel it right to take some action at some stage. But at the moment the main responsibility—it is a very difficult one—rests on the Secretary-General of the United Nations in deciding whether to call another meeting for inter-communal talks on the basis of the proposals put forward by the Turkish Government.
I do not hide from the House the fact that I do not believe that as yet we are approaching an eventual settlement, but I think that both sides should hesitate very seriously before refusing to enter discussions. In international affairs there is very little advantage in refusing to discuss and to come to the negotiating table. I recognise that this is a decision for them—and only for them—to make, but I urge negotiations even if it is entered into without any great sense of optimism.

Mr. Brotherton: Having earlier this afternoon heard the Foreign Secretary's hon. Friend condemn terrorism in the Middle East, may I ask the Foreign Secretary, the next time he meets the EEC

Foreign Ministers, to make it clear to them that Her Majesty's Government equally condemn terrorism in Rhodesia?

Dr. Owen: I have made it clear that I deplore terrorist acts anywhere in the world. If the hon. Gentleman has not heard that, he has not been a very frequent attender in this House.

Mr. David Watkins: May I bring the subject back to the Arab-Israeli conflict and remind my right hon. Friend that we have all been waiting 30 years for the dust to settle, and that there is no evidence that it is likely to settle without some initiatives?
Will my right hon. Friend take an opportunity to advise his EEC colleagues that, in view of their countries' very great commercial involvement in the Middle East, they should be concentrating their minds more on some positive political approach to the cause of peace?

Dr. Owen: Activism in international affairs is always easy to undertake, but I believe that there are times when it is wiser to let these issues be resolved by careful thought. It is well known that there is a major area of disagreement on the interpretation of Resolution 242 of the United Nations and on whether it applies to all three fronts—the West Bank, Sinai and the Golan Heights. In the judgment of Her Majesty's Government, it was always intended that it should apply on all three fronts. I believe that until that issue is resolved it will be very difficult to get into serious negotiations.

Economic and Social Committee

Mr. Haselhurst: asked the Secretary of State for Foreign and Commonwealth Affairs what plans he has to attend a meeting of the Economic and Social Committee of the Community.

Mr. Judd: None, Sir. The Committee normally invites Ministers only from the country holding the Presidency.

Mr. Haselhurst: Would it not be appropriate for the Secretary of State to attend such a meeting in order to demonstrate the British Government's support for the valuable work done in this institution in recent months under British chairmanship, not least in bringing together unions and employers to discuss common problems at EEC level?

Mr. Judd: I am grateful to the hon. Gentleman for that observation. The Government attach the greatest possible importance to the work of the Committee. We are anxious to make sure that, when the new generation of representatives on the Committee is appointed later this year, it will be as strong a team as ever, demonstrating that we want to do all we can to help forward its work.

Mr. MacFarquhar: Even if my hon. Friend does not visit the Committee, will he suggest that it should initiate a discussion on the relationship of the negotiations on textile imports from Portugal to the prospects of Portuguese entry into the EEC? In view of the Government's determination that Portugal should be assisted in this entry, does my hon. Friend agree that every prospect of easing the sales of Portuguese textile goods to EEC countries should be facilitated?

Mr. Judd: The members of the Community are well aware of the problems facing the Portuguese Government in managing their economic recovery, but the precise arrangements that we can work out in the economic and trade spheres, and the rest, depend very much upon the major strategy that the Community has adopted on multi-fibres and generally on its trading arrangements with the outside world.

Mr. Dykes: Since the Economic and Social Committee often discusses financial statistics, will the Minister remind it that, allowing for all adjustments, the total net contribution by the United Kingdom to the Community budget last year was one-sixth of the total amount of debt interest paid by the United Kingdom Government on the IMF loans and rescue package, which has saved this country over the last few years?

Mr. Judd: What should be well understood in this country, and, indeed, in the rest of the Community, is that we are very significant net contributors to the EEC.

President of the Commission

Mr. Crawford: asked the Secretary of State for Foreign and Commonwealth Affairs when he next intends to meet the President of the EEC.

Mr. Judd: My right hon. Friend expects that he will meet both the Danish President of the Community Council of Ministers and the President of the Commission at the next meeting of the Foreign Affairs Council on 2nd May.

Mr. Crawford: Now that a precedent has been set, will the Minister tell the President of the EEC that no one from Scotland or England can be elected to the European Parliament unless he or she has at least 40 per cent. of the votes of his or her total electorate?

Mi. Judd: I am sure that all concerned are well aware of the hon. Gentleman's point.

Mr. Christopher Price: When my hon. Friend meets President Andersen and President Jenkins, will he ask them about the arrangements that are being set on foot to monitor Europe's agreement on firms in South Africa, so that we can make this code of conduct really work and have a policy on South Africa that links up with our policy on Rhodesia and Namibia?

Mr. Judd: The code of conduct adopted by the Nine is a very practical and significant step forward. We are anxious to see it applied effectively and, indeed, would like to see its principles extended to other countries in the OECD, beyond the Community itself.

Mr. Ian Lloyd: Since no national policy is likely to succeed on the very vexed question of shipbuilding, will the Minister, when he next meets the President of the EEC, ask what is the latest thinking of the Economic and Social Committee on this question, in particular on the disastrous competitive national shipbuilding subsidy race?

Mr. Judd: It will be interesting to have the comments of the Economic and Social Committee on the human consequences of policy on this front, but this is a central issue for the Ministers themselves.

Mr. Hoyle: When the meeting takes place with the President, will my hon. Friend please draw to his attention the effect that the German trading position with this country is having on our economic prospects? We are running a deficit with Germany which is greater than that with any other country. Will my hon. Friend ask what measures the Germans are taking to remedy this state of affairs?

Mr. Judd: As the meetings earlier this week demonstrated, the Governments of Germany and of this country are determined to work together in trying to find a way forward. We share a great deal of common concern in our analysis of the situation. We are both determined to see the issues of unemployment and inflation tackled. Above all, we want to generate growth. If we are to do this successfully, it will be important to work with the Community as a whole.

Portugal (Membership)

Mr. Arnold: asked the Secretary of State for Foreign and Commonwealth Affairs when he expects to receive the opinion of the European Commission on the Portuguese application for membership.

Mr. Judd: We expect the Commission's opinion on the Portuguese application to be submitted to the Council in May.

Several Hon. Members: rose—

Mr. Speaker: Order. I promised three minutes' injury time on this subject.

Mr. Arnold: Does the Minister agree with Mr. Natali, the Commissioner for Enlargement, that Portugal will need a transitional period of at least 10 years? Does he also agree with the Commission's view that enlargement will inevitably mean a greater use of majority voting procedures in the Council of Ministers?

Mr. Judd: There are obviously considerable economic considerations, both for Portugal and for the Community as a whole, with regard to Portuguese accession to the Community. A transitional phase will be necessary. The precise time has vet to be worked out, but it may well have to be a considerable period in order to enable Portugal to become fully and effectively a participant within the Community.
We are not convinced about the question of majority voting. For us, there will always remain major issues of national importance on which it should be recognised in the Community that we can proceed sensibly only on the basis of consensus.

Mrs. Dunwoody: Is my hon. Friend aware that the EEC is already preparing measures that discriminate against Portu

gal, before its entry? It is taking action in respect of fortified wines, tomatoes and fish, which are the only viable industries that Portugal has. This is indirectly affecting the British consumer because of the tariffs that the EEC intends to put on those goods. Will my hon. Friend look at this very carefully before he supports any suggestions that Portugal should be maimed in this fashion?

Mr. Judd: Certainly the British Government have no desire to maim the Portuguese economy. We well understand the problems with which that country is confronted. Of course, until Portugal accedes to the Community it is a fact that she has to be treated as part of the general arrangements between the Community and the outside world. I hope that we can move forward steadily and effectively with accession—which Portugal is keen to achieve—so that we can treat her as a member of the Community and not as a country outside.

Mr. John Davies: I realise how serious and difficult are the economic problems that arise in connection with the admission of Portugal—indeed, also Spain and Greece—into the Community, but will the Minister bear in mind how immensely important it is to Portugal, from a political point of view, that early admission should take place? The sustenance of the rather early bud of renewed democracy in that country needs constant help. Will he bear this closely in mind?

Mr. Judd: I am grateful to the right hon. Gentleman. From the Government's point of view, the whole purpose of enlargement is to underpin the process of democracy and the democratisation of Western Europe as a whole. We understand the importance that the Portuguese Government and people attach to accession. We shall be playing our part, as the British Government, in speeding that forward as rapidly as we practically can.

Mr. MacFarquhar: In view of that answer, which I welcome, will not my hon. Friend go a little further and show more flexibility on the issue of current economic negotiations with Portugal? Does not he realise that it would be disastrous if we rigidly adhered to the fact that Portugal is now a nation outside the Community in order to enforce certain things upon her textiles and other exports to


the Community which might lead to an economic war from which Portugal would suffer, so that entry would probably not take place?

Mr. Judd: I can assure my hon. Friend that we shall try to be as imaginative as we can during this period of adjusting Portugal to membership of the Community. It is essentially a process of adjustment. I agree that during this period it would be very silly to take steps that were punitive in their approach to the Portuguese economy.

ARMED FORCES (PRIME MINISTER'S STATEMENT)

Mr. Maxwell-Hyslop: I beg to ask leave to move the Adjournment of the House under Standing Order No. 9 for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
the announcement by the Prime Minister during an interview with Mr. Julian Haviland on 'News at Ten' last night, Tuesday 25th April, that members of the Armed Forces have security in their jobs".
I have given notice to the Prime Minister that I would be making this application. I have received from Independent Television News a transcript of the actual broadcast last night from which I quote the Prime Minister's words. He said:
I think the important thing for the Services is that they have got a firm undertaking from now until 1980 together with security in their jobs—you know there are a lot of people who won't have that and won't have the security of their jobs as well. So you've got to balance all these factors out.
The matter is specific because it is a specific quotation from a statement which the Prime Minister made justifying his belief that members of the Armed Forces ought to be content with the 14 per cent. pay increase announced yesterday. It is important because it represents a critical departure from the current Ministry of Defence practice of terminating prematurely the engagement of members of the Armed Forces, which the Minister of Defence wishes so to terminate, irrespective of whether the Service men concerned are thrown into the pool of unemployed people, and because no announcement of this important change of policy was made in conjunction with the announcement of the pay increase

either in Parliament or elsewhere within the knowledge of Parliament.
I submit that this is such a major change of policy, and such an important announcement by the Prime Minister, that it ought not to wait until Prime Minister's Questions tomorrow but should be debated this very day, so that the Prime Minister can have the opportunity of making in the House the statement of the change of policy which he made in the interview on Independent Television last night and so that he may be questioned by hon. Members upon that statement without another day going by, which might result in confusion and disappointment within the Armed Forces.

Mr. Speaker: Following his customary courtesy, the hon. Gentleman gave me notice before 12 o'clock that he would raise this matter this afternoon and that he would seek leave to move the Adjournment of the House for the purpose of discussing a specific and important matter which he believes should have urgent consideration, namely,
the announcement by the Prime Minister during an interview with Mr. Julian Haviland on 'News at Ten' last night, Tuesday 25th April, that members of the Armed Forces have security in their jobs.
As the House knows, under Standing Order No. 9 I am directed to take into account the several factors set out in the Order but to give no reasons for my decision.
I have listened with great care to what the hon. Gentleman has stated in his application, but I fear I have to rule that the hon. Gentleman's submission does not fall within the provisions of the Standing Order. Therefore, I cannot submit his application to the House.

BILLS PRESENTED

IRON AND STEEL (AMENDMENT)

Mr. Secretary Varley supported by Mr. Secretary Millan, Mr. Secretary John Morris, Mr. Secretary Booth, Mr. Secretary Dell, Mr. Joel Barnett, Mr. Gerald Kaufman and Mr. Les Huckfield, presented a Bill to increase the limit on the aggregate of sums borrowed by, or paid by the Secretary of State to, the British Steel Corporation and sums borrowed by the publicly-owned companies; And the same was read the First time; and ordered


to be read a Second time tomorrow and to be printed. [Bill 111.]

DEER

Mr. John Farr, supported by Mr. Ben Ford, Mr. Peter Hardy, Mr. Stephen Ross, Mr. A. J. Beith, Mr. W. Benyon and Mr. Patrick McNair-Wilson presented a Bill to repeal and re-enact with amendments the Deer Act 1963 with respect to England and Wales and Northern Ireland to prevent the poaching and the illegal taking, killing and injuring of deer in England and Wales and Northern Ireland; to control the sales and purchases of venison in England and Wales and Northern Ireland; and for purposes connected with the matters aforesaid; And the same was read the First time; and ordered to be read a Second time on Friday 5th May and to be printed. [Bill 112.]

STATUTORY INSTRUMENTS, &c.

Ordered,
That the Social Security (Overlapping Benefits) Amendment Regulations 1978 (S.I., 1978, No. 524) be referred to a Standing Committee on Statutory Instruments, &amp;c.—[[Mr. Foot.]

BRITISH RAIL CATERING

3.39 p.m.

Mr. Giles Shaw: I beg to move,
That leave be given to bring in a Bill to denationalise catering facilities provided by British Transport Hotels Limited for British Rail; and to make consequential provisions in relation thereto.
Let me begin by stressing that in recent times British Rail has shown a much greater sensitivity to the need to improve standards and performance of British Rail catering both on certain station buffets and on trains. But the fact remains—in my view it is a principle which is not easily bucked—that British Rail primarily exists to run an effective and efficient railway service, which demands a much greater concentration of effort on capital projects to improve track, trains and allied engineering services than it does to maintain an efficient kitchen and dining car or a wide variety of food in a station buffet. Hence it has been obvious for many years that the catering side of British Rail is very much the Cinderella of the outfit.
This apparently embarrassing conflict was well set out in a report by British Rail executives in evidence to Sub-Committee A of the Select Committee on Nationalised Industries in February 1977. In an interview with that Committee on 8th February 1977, the director of British Rail responsible said:
These two aims of satisfying the customer and keeping marketing costs down to manageable proportions are sometimes in conflict, not surprisingly, and one tries to achieve a balance by sensitive judgment of priorities … This balance between a service and the cost of providing it is something which is regularly under review. In fact, there has been over recent years an ongoing—and it is still going on—respecification of the train catering requirement to meet changed eating habits.
The first purpose of this Bill, therefore, is to relieve British Rail of the embarrassment of seeking to be responsible for two aspects of travellers' requirements which are so frequently in conflict.
I do not consider that the catering facilities of British Rail should be regarded as a marketing embarrassment when it might be possible for them to be operated by the private sector as the major objective of a business. Secondly, in terms of economic performance, the whole House would be anxious to see


that British Rail should continue to take developments which lead to profitable business.
From the latest public figures available, catering on stations generated a surplus of £1·2 million before paying rentals of £0·6 million. But train catering showed an operating net loss of £2·4 million in maintaining catering service facilities on more than 900 weekly trains. Therefore, the overall position of catering on stations and on trains is one of running at a very substantial loss.
Perhaps the House should understand that catering is one of the activities carried out by a subsidiary of British Transport Hotels Ltd., the subsidiary being known as Travellers-Fare. At the end of 1976, BTH operated some 181 station and catering units. But it also had 55 operating units in the hands of tenants. So the idea of franchising in respect of British Rail's operation is far from new. Indeed, it is established.
It will be a second objective of my Bill, therefore, to encourage this trend to franchising which has been examined frequently as a possible solution to British Rail's station catering problems. For evidence of this, I turn to the Central Transport Users' Consultative Council, in whose 1977 annual report the matter of franchising was discussed. I quote from page 10 of that report:
To the Sub-Committee's suggestion that where train catering facilities appeared to be uneconomical they could perhaps be provided by the franchise system, the Board"—
the British Rail board—
replied that the standards specified by the Passenger Business could not be guaranteed if the train catering was fragmented in this way. The Committee decided that the Sub-Committee"—
of the Transport Consultative Committee—
should investigate the advantages or disadvantages of using the franchise system for train catering.
It is only right equally to inform the House that the Sub-Committee to which I referred examined this possibility and gave some reasons why in its view it might not be possible. Amongst the reasons given were, first, that the private entrepreneur might consider the risks too great in view of the lack of storage and refrigeration facilities and the lack of sufficient detail regarding trade levels,

secondly, that of having to operate as self-employed with all the problems of VAT regulations, thirdly, that trade union opposition was most likely, and, fourthly, that choosing a suitable route for an experiment might be difficult.
I submit that these are not sufficient reasons for deciding that a franchising arrangement for British Rail catering cannot be run and manned. It is this lack of flexibility which formed part of the criticism of British Rail by the Sub-Committee of the Select Committee on Nationalised Industries in its report in 1977.
The answer was in part clear—that such flexibility required readapting the system, and that would require modification of existing vehicles and capital reinvestment. None would deny this as being necessary, but the point is that catering services are regarded as being so low on the list of priorities that their chances of getting a slice of British Rail's investment cake are very slim, and the travelling public today are being served in ancient rolling stock under an inflexible system.
I do not see why this should not be livened up by a healthy injection of competition. Clearly, the most fruitful ground for this to occur would be on railway station buffets and other catering services where there are increasing signs that Travellers-Fare, while seeking to modify its menu and pricing, is still offering fairly unappetising services.
Why is it that many station buffets close at 8 p.m.? Why is it that many do not open before 10 a.m. on Sundays? It is largely because these institutions are run as part of a greater institution, namely British Rail, and are not run by normal competitive criteria which would provide keener services for the travelling consumer.
It would be possible to attract the public to eating in railway station restaurants if their service and pricing were improved. Such is the case on the Continent. Many gourmets descend on the Gare de l'Est in Paris and other French stations primarily for eating rather than for travelling purposes. Although within the British Transport Hotels there are many first-class hotels, they tend to be those less associated with their proximity to railway services than with their


proximity to leisure activities such as golf at Turnbury or Gleneagles. The principle here is quite clearly that to tailor a package to the holidaymaker and tourist is good, but that to tailor a package to those who happen to travel on British Rail is very difficult and unprofitable. In my view, the public deserve the best catering available whenever they travel, and they have been expressing concern in increasing numbers that the standards have slipped badly.
I am aware that the management of British Rail has just announced for a temporary period a reduction of some prices of British Rail foods. The cost of coffee and biscuits has dropped from 29p to 24p and that of coffee and cheese sandwiches from 51p to 44p. A standard cup of powdered coffee plus hot water will now be 15p instead of 17p on most services. However, anyone who has the good fortune to consume it in a railway dining car will find that it still costs 24p. That is because the menu describes the cup of coffee as being "freshly made".
There has been a clear tendency for British Rail to concentrate on the expense account diner instead of on the travelling family. But even the business man must be getting a little doubtful when he is served grilled salmon maitre d'hotel at £3·85 or with chicken stanley at £3·40, so called because it is presumed to be chicken.
Then, of course, there are wines from the British Transport Hotel cellars, located in Derby, I believe, including the new French table versions vin blanc, vin rouge and vin rosé, which are the Freeman, Hardy and Willis amongst viniculturists.
The matter of principle which causes most concern remains the extent to which British Rail should enjoy the monopoly of catering services to its passengers as well as the monopoly of selling them tickets and travel. As the Price Commission said in paragraph 153 of its recent report, the British Rail board—
are actively developing station trading facilities including the development of franchise arrangements. The catering service on trains is currently being reviewed.
I accept that it is a necessary provision. But it is clear that it is seen as a marketing cost designed to hold and guarantee business when it could and should be seen as a marketing oppor

tunity in its own right. That is why the development of franchising, which the British Rail board apparently is considering, should be taken further and why it should become by Act of Parliament a requirement that it seeks alternative sources of capital to run and develop the catering services for the travelling public on British Rail.
Just as British Rail offers Gold Star weekend packages at their hotels, it surely could offer an inclusive meal ticket for family snack facilities to enable Awayday returns to become a more attractive form of travel to a wider number of people.
This Bill, therefore, will be in the interests not only of British Rail, which seeks to eliminate losses and yet is confined by restraints on capital expenditure, but also of the travelling public, who will be able to obtain better pricing through competition, a wider variety of foods and from station services a source of catering which could and should become a matter of local interest and pride.
I commend the Bill to the House.

3.49 p.m.

Mr. Richard Buchanan: rose—

Mr. Speaker: Does the hon. Member wish to oppose the Bill?

Mr. Buchanan: I do, Sir.
Throughout the period that the hon. Member for Pudsey (Mr. Shaw) has been in the House, I have served on various Committees with him and have formed a high opinion of his ability and have appreciated his pleasant personality. It is therefore more in sorrow than in anger that I oppose the Bill, because he is stooping to the tedious repetition of the anti-nationalisation argument perpetuated by the Conservative Party.
The hon. Member is seeking the denationalisation of British Rail catering. Which part? Does he mean the hotels which make a profit, the station buffets which make a profit, or the train catering which makes a huge loss? There are no prizes for the answer to that one.
I do not think that the hon. Gentleman is acquainted with the realities of the situation. It is true that British Rail catering makes a loss. The hotels make a profit of about £850,000, the station buffets about £750,000. But there is a


loss on train catering of £2,300,000, which is less than 1 per cent. of the Inter-City passenger revenue. Its impact on the generality of passenger fares is minuscule. To say that passengers who do not participate in the catering subsidise those who do is arrant nonsense.
One can consider our own Refreshment Department. One of its great handicaps is that it can never estimate the needs. On a running three-line Whip, the Dining Room might be empty. On a one-line Whip, when it seems that hardly anyone is about, the Dining Room might be packed. A similar impossibility of gauging needs leads British Rail, particularly on its trains, into this deficit.
We seldom hear complaints about similar losses on airlines, simply because a meal is included in the marketing package. If the catering were costed separately, I am sure that it would show quite a loss.
The hon. Member said nothing about withdrawing catering from British trains, but the last time that private enterprise dabbled in a nationalised industry, if a line or service did not pay, it was simply chopped off. How bitterly today we regret the lines in the North of Scotland which were chopped off by the Beeching axe.
The withdrawal of train catering would be a sure loser. I do not see private enterprise, under any franchise, taking this on. It would mean extensive and expensive reinvestment in dining cars and in kitchens.
Many of us have for long advocated a considerable reinvestment in British Rail and will continue to do so. There is to be an investment in new rolling stock, including dining cars and kitchens. Most of the outdated vehicles should be scrapped. I hope that the Under-Secretary of State for Transport, who is present, will take note.
The staff of Travellers-Fare, who have been ridiculed, do a magnificent job on trains. They work in very cramped and difficult conditions. British Rail has speeded up its service. My journey to London used to take 10 hours. I would get on a sleeper at St. Enoch's and I could read my book for a few hours, fall asleep and wake up in London. Now I am there only a few hours. The Travellers-Fare people have to try to serve two meals in that short time. They

often have to do so on trains travelling at 100 miles an hour and therefore swaying considerably.
Travellers-Fare has consistently shown a better economic return than similar organisations on the Continent and in America. The only one that makes any profit is the Swiss.
British Rail is taking steps to improve its service across the board, including its catering provision—as it always does. Reorganisation is taking place. Travellers-Fare has been incorporated into British Transport Hotels with a remit to exploit every opportunity for the successful expansion and development of the business. New services such as the Gold Star menu are proving popular and the experimental reduction of buffet prices and an improved range of food are boons to the travellers. Station buffets are being refurbished and we are told that dining cars will be refurbished. If they are out of date, they should be scrapped.
Who in private enterprise would take on rail catering? There is one claimant in the field—Sir Charles Forte, who hoisted himself into the top ten individual contributors to the Tory Party with a contribution of £25,000. He is a man who believes in profitability. Was it entirely accidental that Sir Charles Forte staked his claim on the very day on which the Egon Ronay survey produced the most damning report on motorway cafeterias run by his organisation? Or was it a desperate device to divert attention from his predicament? I think that that is what it was—and this Bill is an equally transparent manoeuvre by the supporters of the Tory Party.
With all the difficulties inherent in catering on trains, Travellers-Fare services have improved immeasurably and will continue to do so. Station buffets pay and provide a good service. As I travel from Euston to Glasgow, I should hate to go into a buffet at either end and find some of the conditions that Egon Ronay found in motorway cafes.
Let us take Newport Pagnell—[HON. MEMBERS: "No, you take it."] Egon Ronay spoke of an indefensible state of neglect, badly worn carpets, dirty seats, sluggish table clearing and a clutter of rubbish and cigarette ends. Nor would I appreciate going for a meal or a snack in the dining car if I found, as Egon Ronay did in the motorway cafeterias,


that sausages were inedible, the fish was stale, the pea soup was lurid, the hamburgers were tough and there were watery carrots. And those were among the more complimentary remarks. That is what the hon. Member for Pudsey wants to introduce to British Rail.
Sir Charles Forte has a monumental task cleaning up his own organisation. Let him begin with the motorway cafes.

Division No. 191]
AYES
[3.58 p.m.


Adley, Robert
Harrison, Col Sir Harwood (Eye)
Pattle, Geoffrey


Alison, Michael
Harvie Anderson, Rt Hon Miss
Percival, Ian


Arnold, Tom
Havers, Rt Hon Sir Michael
Prentice, Rt Hon Reg


Atkins, Rt Hon H. (Spelthorne)
Hodgson, Robin
Price, David (Eastleigh)


Bennett, Dr Reginald (Fareham)
Holland, Philip
Raison, Timothy


Berry, Hon Anthony
Hooson, Emlyn
Rathbone, Tim


Biggs-Davison, John
Howe, Rt Hon Sir Geoffrey
Rees-Davies, W. R.


Blaker, Peter
Howell, Ralph (North Norfolk)
Rhodes James, R.


Boscawen, Hon Robert
Hunt, David (Wirral)
Ridley, Hon Nicholas


Boyson, Dr Rhodes (Brent)
Hutchison, Michael Clark
Ridsdale, Julian


Brotherton, Michael
Irving, Charles (Cheltenham)
Rifkind, Malcolm


Buchanan-Smith, Alick
Johnson Smith, G. (E Grinstead)
Roberts, Michael (Cardiff NW)


Buck, Antony
Jones, Arthur (Daventry)
Roberts, Wyn (Conway)


Butler, Adam (Bosworth)
Kellett-Bowman, Mrs Elaine
St. John-Stevas, Norman


Chalker, Mrs Lynda
Knox, David
Shelton, William (Streatham)


Clark, William (Croydon S)
Lamont, Norman
Sims, Roger


Cope, John
Latham, Michael (Melton)
Sinclair, Sir George


Crouch, David
Le Marchant, Spencer
Skeet, T. H. H.


Douglas-Hamilton, Lord James
Lester, Jim (Beeston)
Smith, Timothy John (Ashfield)


Drayson, Burnaby
Lewis, Kenneth (Rutland)
Speed, Keith


Durant, Tony
Lloyd, Ian
Spence, John


Dykes, Hugh
Loveridge, John
Stanley, John


Edwards, Nicholas (Pembroke)
Luce, Richard
Steen, Anthony (Wavertree)


Eyre, Reginald
Macfarlane, Neil
Stewart, Ian (Hitchin)


Fairbairn, Nicholas
MacGregor, John
Stokes, John


Fairgrieve, Russell
MacKay, Andrew (Stechford)
Stradling Thomas, J.


Farr, John
Marten, Neil
Taylor, R. (Croydon NW)


Finsberg, Geoffrey
Mates, Michael
Tebbit, Norman


Fisher, Sir Nigel
Mather, Carol
Temple-Morris, Peter


Fletcher-Cooke, Charles
Mawby, Ray
Thatcher, Rt Hon Margaret


Fookes, Miss Janet
Maxwell-Hyslop, Robin
Townsend, Cyril D.


Fraser, Rt Hon H. (Stafford &amp; St)
Mayhew, Patrick
Walder, David (Clitheroe)


Galbraith, Hon T. G. D.
Meyer, Sir Anthony
Walker-Smith, Rt Hon Sir Derek


Gardiner, George (Reigate)
Miscampbell, Norman
Wall, Patrick


Gilmour, Rt Hon Ian (Chesham)
Molyneaux, James
Walters, Dennis


Gilmour, Sir John (East Fife)
Monro, Hector
Weatherill, Bernard


Glyn, Dr Alan
Moore, John (Croydon C)
Whitelaw, Rt Hon William


Goodhart, Philip
More, Jasper (Ludlow)
Wiggin, Jerry


Goodhew, Victor
Morris, Michael (Northampton S)
Winterton, Nicholas


Goodlad, Alastair
Morrison, Charles (Devizes)
Young, Sir G. (Ealing, Acton)


Gower, Sir Raymond (Barry)
Morrison, Hon Peter (Chester)

Younger, Hon George


Gray, Hamish
Neave, Airey



Grimond, Rt Hon J.
Newton, Tony
TELLERS FOR THE AYES:


Grist, Ian
Nott, John
Mr. Giles Shaw and


Hamilton, Michael (Salisbury)
Oppenheim, Mrs Sally
Mr. Michael Neubert.


Hampson, Dr Keith
Page, Rt Hon R. Graham (Crosby)



Hannam, John
Parkinson, Cecil





NOES


Allaun, Frank
Callaghan, Jim (Middleton &amp; P)
Dean, Joseph (Leeds West)


Archer, Rt Hon Peter
Campbell, Ian
Doig, Peter


Armstrong, Ernest
Canavan, Dennis
Dormand, J. D.


Atkins, Ronald (Preston N)
Cant, R. B.
Douglas-Mann, Bruce


Atkinson, Norman
Carmichael, Neil
Dewar, Donald


Barnett, Guy (Greenwich)
Cartwright, John
Edge, Geoff


Bates, Alf
Castle, Rt Hon Barbara
Ellis, John (Brigg &amp; Scun)


Beith, A. J.
Clemitson, Ivon
English, Michael


Benn, Rt Hon Anthony Wedgwood
Cocks, Rt Hon Michael (Bristol S)
Evans, Gwynfor (Carmarthen)


Bennett, Andrew (Stockport N)
Cohen, Stanley
Evans, Ioan (Aberdare)


Bishop, Rt Hon Edward
Coleman, Donald
Evans, John (Newton)



Blenkinsop, Arthur
Conlan, Bernard
Ewing, Harry (Stirling)


Bottomley, Rt Hon Arthur
Corbett, Robin
Fernyhough, Rt Hon E.


Boyden, James (Bish Auck)

Cowans, Harry
Flannery, Martin


Bradley, Tom
Crowther, Stan (Rotherham)
Fletcher, Ted (Darlington)


Bray, Dr Jeremy
Cryer, Bob
Foot, Rt Hon Michael


Buchan, Norman
Davies, Bryan (Enfield N)
Forrester, John


Buchanan, Richard
Davis, Clinton (Hackney C)
Fowler, Gerald (The Wrekin)


Butler, Mrs Joyce (Wood Green)
Deakins, Eric
Freeson, Rt Hon Reginald

I would oppose the Bill on those grounds.

Question put, pursuant to Standing Order No. 13 (Motions for leave to bring in Bills and Nominations of Select Committees at Commencement of Public Business):

The House divided: Ayes 135, Noes 164.

Freud, Clement
Lyon, Alexander (York)
Sandelson, Neville


Garrett, John (Norwich S)
Lyons, Edward (Bradford W)
Sedgemore, Brian


George, Bruce
McCartney, Hugh
Sever, John


Golding, John
McElhone, Frank
Shaw, Arnold (Ilford South)


Gourlay, Harry
MacFarquhar, Roderick
Shore, Rt Hon Peter


Graham, Ted
MacKenzie, Rt Hon Gregor
Silverman, Julius


Grant, John (Islington C)
McMillan, Tom (Glasgow C)
Skinner, Dennis


Grocott, Bruce
Madden, Max
Smith, John (N Lanarkshire)


Hamilton, James (Bothwell)
Mallalieu, J. P. W.
Snape, Peter


Harper, Joseph
Marshall, Dr Edmund (Goole)
Steel, Rt Hon David


Harrison, Rt Hon Walter
Marshall, Jim (Leicester S)
Stewart, Rt Hon M. (Fulham)


Hayman, Mrs Helene
Maynard, Miss Joan
Summerskill, Hon Dr Shirley


Heffer, Eric S.
Mendelson, John
Taylor, Mrs Ann (Bolton W)


Hooley, Frank
Mikardo, Ian
Thomas, Mike (Newcastle E)


Horam, John
Miller, Dr M. S. (E Kilbride)
Thomas, Ron (Bristol NW)


Hoyle, Doug (Nelson)
Mitchell, Austin
Tilley, John (Lambeth, Central)


Huckfield, Les
Morris, Alfred (Wythenshawe)
Tuck, Raphael


Hughes, Rt Hon C. (Anglesey)
Morris, Rt Hon Charles R.
Wainwright, Edwin (Dearne V)


Hughes, Robert (Aberdeen N)
Murray, Rt Hon Ronald King
Wainwright, Richard (Colne V)


Hughes, Roy (Newport)
Newens, Stanley
Walker, Terry (Kingswood)


Hunter, Adam
Noble, Mike
Ward, Michael


Irving, Rt Hon S. (Dartford)
Orme, Rt Hon Stanley
Watkins, David


Janner, Greville
Palmer, Arthur
White, Frank R. (Bury)


Jeger, Mrs Lena
Parker, John
Whitlock, William


Jenkins, Hugh (Putney)
Parry, Robert
Wigley, Dafydd


Johnson, James (Hull West)
Penhaligon, David
Willey, Rt Hon Frederick


Jones, Barry (East Flint)
Perry, Ernest
Williams, Alan Lee (Hornch'ch)


Kelley, Richard
Price, C. (Lewisham W)
Williams, Rt Hon Shirley (Hertford)


Kerr, Russell
Price, William (Rugby)
Wilson, William (Coventry SE)


Kilroy-Silk, Robert
Radice, Giles
Woodall, Alec


Kinnock, Neil
Roberts, Albert (Normanton)
Woof, Robert


Lambie, David
Robinson, Geoffrey
Wrigglesworth, Ian


Lamborn, Harry
Roderick, Caerwyn
Young, David (Bolton E)


Lamond, James
Rodgers, George (Chorley)



Lewis, Ron (Carlisle)
Rooker, J. W.
TELLERS FOR THE NOES:


Litterick, Tom
Ross, Stephen (Isle of Wight)
Mr. Leslie Spriggs and


Loyden, Eddie
Rowlands, Ted
Mr. Nigel Spearing.

Question accordingly negatived.

Orders of the Day — INNER URBAN AREAS BILL

As amended (in the Standing Committee), considered.

4.10 p.m.

Mr. Alexander W. Lyon: On a point of order, Mr. Speaker. I do not wish to challenge your selection of amendments, which, in any case, I am forbidden to do, but in relation to New Clause No. 8, which stands in my name, I wish to raise the issue of the way in which hon. Members are treated in respect of the selection of amendments.
The new clause was an attempt to revise Section 11 of the Local Government Act 1966 which is the only programme available to the Government for giving money to local authorities to help with the problems of New Commonwealth immigrants living in their areas.
At a time when everyone in the count-try is concerned about the state of race relations and all the major parties agree that there should be a positive response to the difficulties of race relations, it seemed an appropriate moment to try to widen the sphere of Section 11 in order to obtain better assistance for minority groups in this country. It was with that in mind that I chose the opportunity of this Bill to table the new clause.
In order to bring it within the terms of the Bill, I specifically limited it, by the first paragraph, to an amendment relating to the special areas of need under Clause 4(4) of the Bill. I thought that it was in order and would be called.
However, one of the learned Clerks has advised you that it is out of order because—

Mr. Speaker: Order. I must ask the hon. Gentleman to confine his point of order to me. It is not customary in the House to refer to my advisers.

Mr. Lyon: I shall do that, Mr. Speaker. The new clause has been ruled out of order on the basis that it is outside the Money Resolution. I take exception to that view. I do not believe that it is outside the Money Resolution.
The difficulty is that I have no means within the procedure of the House to bring

that to your attention unless I go to see the Clerk, before he makes his decision, in order to find out whether the new clause is in order. The result is that the Clerk has to be approached, has to consider the matter and has to get in touch with the hon. Member.

Mr. Speaker: Order. I have just told the hon. Member that he should refer to me. The Clerk does not decide which amendments are called. I decide that. The hon. Gentleman must direct his point of order to me or resume his seat.

Mr. Lyon: I shall direct the rest of my remarks to you, Mr. Speaker. Recognising that you are the final judge, I did my best to get in touch with you. The only way I can get in touch with you is to raise the matter on the Floor of the House or to see you before the Bill comes before the House.
The only opportunity I have of doing that is immediately before the debate, because the selection does not take place until 12 o'clock on the day of the debate. I came to see you at the earliest convenient opportunity and was told that you were not available for discussion.
I do not wish to suggest that that was a lack of courtesy to me. I am simply seeking to say that when hon. Members have a matter of first importance—as this is—affecting 2 million people in this country on the major issue of race relations and want to have it discussed at the most convenient opportunity on a Bill of this nature, the only way in which they can make representations to you is by raising the matter on the Floor of the House—even though we know it to be incapable of a positive response because the rules of order of the House make it impossible to challenge your selection at this stage.
I am seeking to find a way by which we can make a positive application to you about a legitimate disagreement of interpretation on the advice on which you act in regard to what is and is not in order in relation to a particular amendment.
If the new clause has been ruled out of order because it is thought to be outside the Money Resolution—on an interpretation of the resolution which the House might not accept—surely it is right that hon. Members should be allowed


to put their case to you when there is an opportunity of changing the selection.
The result of the procedure of the House is that I have not been consulted about what my intention was within the new clause or about any suggestion to you that it might be outside the Money Resolution. I have not been given an opportunity to amend the new clause so that it was brought within the terms of the Money Resolution if, indeed, it was outside those terms.
4.15 p.m.
All this means that we cannot discuss this issue of first importance although there is a new clause on the Order Paper, signed by more than a dozen hon. Members, including two Privy Councillors and the Chief Whip of the Liberal Party, on an issue that is supported by hon. Members in all parts of the House. The result is that freedom of debate on this central issue is denied to us. That is a matter of real importance to the House, and I hope that it might be considered.
I hope that, even at this late stage, you may find it possible to allow us to debate New Clause No. 8, but I recognise that, under the Standing Orders, I am not able to make that request to you directly. However, I hope that you might still reconsider your attitude.

Mr. Speaker: I understand that the hon. Member for York (Mr. Lyon) called at my office at 2.5 p.m. today and asked to see me. That was just before I got ready to come into the Chamber. The hon. Gentleman also sent a message of which he is aware.
I should remind the House that it has never been the practice of my predecessors or myself to see hon. Members about the selection of amendments. I do not see those who put down the amendments or those who would have preferred them not to be put down. If I did, we would enter into endless arguments. The life of the Speaker would be intolerable if every time I had to consider the selection of amendments, I had a disappointed hon. Member wanting to argue the case or a Minister who did not wish the argument to be heard coming to see me to say that I should not have selected an amendment.
The hon. Gentleman said that he was not consulted. Hon. Members never have

been consulted when they table amendments.

Mr. Dennis Canavan: Why not?

Mr. Speaker: Am I expected to ask hon. Members what they intend by their amendments? Of course not. The hon. Member for West Stirlingshire (Mr. Canavan) has been here for three years, or is it four years—

Mr. Canavan: Four years.

Mr. Speaker: If he stays here as long as I have been here, he will find that it is not the custom for the occupant of the Chair to send for hon. Members to ask what their amendment means. The Clerk's Department is available for advice, but it is not for the Clerk's Department to take the initiative. It is for hon. Members who feel that they have some doubt about an amendment to go to the Clerk's Department. I am sure that I can say unhesitatingly that, as hon. Members will have experienced, they will get the help they look for.

Mr. Canavan: Sometimes.

Mr. Speaker: In regard to New Clause No. 8, the hon. Member for York said that two Privy Councillors and the Chief Whip of the Liberal Party had signed it. But even if every hon. Member had signed it, I could still not select it—and not merely because of the Money Resolution. I note that subsection (3) seeks to repeal Section 1 of the Local Government Act 1966. That section gives the Secretary of State power to make grants to certain local authorities over the whole country.
The Bill is confined to inner urban areas, and the new clause is also out of order because it seeks to repeal a power that affects areas that are not within the scope of the Bill.

Mr. Stephen Ross: Further to that point of order, Mr. Speaker. May I take it that your remarks in relation to New Clause No. 8 apply also to New Clause No. 7, which is in the names of myself and my right hon. and hon. Friends? Without challenging your ruling, Mr. Speaker, but because there is frustration that we are not to be able to debate this matter this afternoon, would the Minister indicate what his attitude


would have been had these new clauses been called?

Mr. Speaker: Of course not. We are not going to debate amendments which are not called. If the Minister is allowed to give one argument, others will wish to be allowed to give others. There is no argument about the selection of amendments. That is the responsibility which the House has given to me. If I had to argue every time an hon. Member's amendment was not selected, we should never get through the Report stage of a Bill.

Mr. Alexander W. Lyon: Further to that point of order, Mr. Speaker. You said in your ruling that it would be impossible for the Clerks or yourself to approach hon. Members about what they mean by their proposed amendments. However, the Standing Orders of the House say that the Speaker or Chairman of the Committee can ask the hon. Member in the course of the debate what is intended by the amendment in order to make a ruling about whether it is in order. If that can be done on the Floor of the House, surely it is possible for the Clerks to approach Members about amendments which they regard as being out of order, so that there can be a proper discussion about it before they give any advice to you.

Mr. Speaker: I disagree with the hon. Member. I do not believe that we should put on to the Clerks of the House the responsibility to chase hon. Members if they believe that their amendment is out of order. When the Order Paper appears and the Clerks or my advisers see what hon. Members wish to present to the House, their responsibility is to give me their advice. But it is my decision at the end of the day. It is my decision on each of the amendments. I suggest that we should now continue with our business.

Mr. Bruce Douglas-Mann: Further to that point of order, Mr. Speaker. I do not dispute your ruling, but I ask you to seek to ensure that the procedures are improved in the future. It is the function of the House to scrutinise legislation and to ensure that the real issues are discussed. In relation to this and many other Bills, the consequence of the procedures of the

House, of which we appear to be prisoners, is that we frequently find that we are discussing not the real issues but those which are much less important. I urge you, Mr. Speaker, to discuss with the appropriate Committee of the House ways in which we could have rulings about the selection of amendments early enough to enable discussions to take place.
You, Mr. Speaker, suggested that Ministers might come to you and say that they do not want a certain amendment discussed. I suggest that you should give them very short shrift if they do that. If there is an issue to be discussed, it is for the House to discuss it. Matters which are relevant should not be ruled out of order when they are the real issues. This has occurred on other Bills. I hope that you will do what you can to ensure that the House has the opportunity to fulfill its real functions.

Mr. Speaker: I am the servant of the House. I want to do my best. The hon. Member's amendment is clearly out of order for the reason that I have explained—the repeal of Section 1 of the Local Government Act 1976.

Mr. Frank Hooley: On a different point of order, Mr. Speaker. I notice that the first group of amendments is a disparate group covering a wide sphere. I hope that a separate vote on Government Amendment No. 3, will be permissible.

Mr. Speaker: Yes, it is bound to be.

New Clause No. 1

DECLARATION OF, AND CHANGES IN, INDUSTRIAL IMPROVEMENT AREAS

'—(1) The provisions of the Schedule to this Act shall have effect as respects the procedure for declaring areas to be, and for making changes in, industrial improvement areas.
(2) In this Act "industrial improvement area", in relation to a designated district authority, means an area declared to be such an area by that authority.'—[Mr. Guy Barney.]

Brought up, and read the First time.

The Under-Secretary of State for the Environment (Mr. Guy Barnett): I beg to move, That the clause be read a Second time.

Mr. Speaker: With this we may discuss Government New Clause No. 2—Grants for converting or improving buildings—and the following amendments:
No. 7, in Clause 3, page 3, line 36, after section', insert Commercial and'.
No. 13, in page 4, line 13, after second 'of', insert 'Commercial or'.
No. 14, in page 4, line 14, after 'into', insert 'Commercial or'.
No. 18 in page 4, line 27, after 'created', insert 'or retained'.
No. 34, in Clause 12, page 8, line 33, at end insert
'"Commercial" has the meaning given by Classes I, II and III of the Town and Country Planning (Use Classes) Order 1972'.
No. 36, in page 9, line 1, leave out from 'building' to end of line 6 and insert
'means any building used for the purposes of manufacturing goods or providing services or of carrying out operations ancillary to this'.
We may also discuss Government Amendments Nos. 3, 6, 8, 11, 12, 22, 44, 35, 39 and 42.

Mr. Barnett: With New Clauses Nos. 1 and 2 and the related group of amendments we are seeking to clarify the operation of Clause 3 by separating out the definition of an industrial improvement area and the two types of assistance that can be given in those areas. In addition, we are introducing a number of changes to the actual provisions. Some of these changes were pressed on us in Committee, and although we were unable to accept them then, we now consider that there are a number of useful improvements that can be made. As we discuss the various changes that we are putting forward, the House will appreciate that the work of the Committee was well worth while and that we learned a good deal from the arguments that were advanced from both sides of the Committee. We have taken full cognisance of the useful suggestions that were made.
This group, particularly Amendments Nos. 3 and 22, also provide for the powers in these clauses and throughout the Bill to be capable of exercise by county councils, as well as by district councils. This reinstates the provisions to this effect which were deleted in the Standing Committee.
It might be useful to the House if I describe briefly the purpose of each amendment.
Amendment No. 6 deletes subsection (1) from Clause 3 so that New Clause No. 1 can provide specifically for the declaration of industrial improvement areas by reference to the procedure in the Schedule. Amendments Nos. 11 and 12 delete the building grant provision from Clause 3 to pave the way for their replacement by New Clause No. 2. The remainder of the old Clause 3 will then deal only with the loans and grants for environmental works in industrial improvement areas.
Apart from these rearrangements, the only change to Clause 3 is to amend the wording in subsection (2) with Amendment No. 8. It seemed from the discussion in Committee that using the words
the amenities of the area or of buildings in the area
might give rise to some doubt. We are therefore seeking to replace that phrase with the simpler concept of the carrying out of works being of "benefit to the area". This brings Clause 3 into line with the other clauses in the Bill where the designated district authority in deciding whether to aid works must consider whether they will benefit the appropriate area. The same formula is also used in subsection (1) of the New Clause No. 2 and similar wording is used in the proposed amendment to the Schedule—Amendment No. 39.
The other changes of substance are in New Clause No. 2. Hon. Members will see that subsection (2) of the new clause refers to grants being given for works to industrial or commercial buildings. We had considerable discussion of this point in Committee and an amendment was carried to the definition of industrial building to include warehouses. We so long as the industrial improvement area is primarily concerned with industry—we deal with that point on Amendment No. 39—it is reasonable to provide for grants to be paid for works on any industrial or commercial building. This will cover offices, shops and service trades as well as manufacturing industry.
This goes somewhat wider than the amendment carried in Committee, but it emphasises our concern—which was expressed by the Secretary of State on Second Reading—that all forms of


employment should be assisted and encouraged in these areas. The hon. Member for the Isle of Wight (Mr. Ross) has tabled amendments on the same lines. I hope that he will be satisfied by our amendments.
The second change that hon. Members will notice is the addition in subsection (3) of the new clause of the words "or preserved". The limit on the grant that can be paid is now related to the number of jobs that are "created or preserved" in the improved or converted building.
Again this is a point on which we were pressed by the Committee and the opinion was expressed that there was no need for such a grant limit at all. We think that it is right for there to be such a limit on the grant to avoid extensive subsidy to unnecessarily expensive projects. However, one of the main problems of inner city areas is that firms, particularly small firms, are often forced to close because of the difficulty of funding improved premises at a cost they can afford.
The grants provided under this clause will now be available to such firms which could, with assistance, survive if they improved their existing building. The grant will not simply act as an indiscriminate subsidy propping up failing firms, because the firms will still have to match the grant with their own investment.
I notice that Opposition Members have put down an amendment, Amendment No. 18, with a similar effect to this change, and I therefore hope that they will be able to support this Government amendment.
4.30 p.m.
There is one further, minor change in the new clause. By including in subsection (5) the wording "intended for use" we seek to ensure that grants will be available whatever the existing use of a building so long as it becomes an "industrial or commercial" building.
Amendment No. 35 makes consequential changes to the definitions in Clause 12.
Amendment No. 39 revises the wording of paragraph 1 of the schedule to reinstate the requirement that an industrial improvement area should be an area that is predominantly industrial, although in addition it provides that an area zoned for industry can also be made an Indus

trial improvement area. We also reinstate here the requirement that one designated district authority should consult the other before declaring an industrial improvement area. This is consequential upon the restoration of the counties in Clause 1, achieved by Amendments Nos. 3 and 22.
In addition, perhaps I should refer to a minor consequential amendment, Amendment No. 44, which arises from the rearrangement of Clause 3. The order-making power relating to the limit of building grants is now in the new clause.
I need also to refer to Amendments Nos. 33 and 22, which make possible the exercise of the powers of these clauses and the powers throughout the Bill by county councils as well as district authorities. As members of the Committee will recall, we had an extensive debate on this subject. I emphasised then, as I do now, that our inner cities policy is founded on the principle of co-operation between different levels of government—central government, county authorities and the districts. Each has its part to play acording to its resources and statutory functions, although quite clearly on many matters the district will be in the lead. This co-operative approach, enabling concerted action to be taken to tackle inner city problems, finds its highest expression in the seven partnerships. But all inner areas need the same concerted approach. So it is completely against the spirit of co-operation to exclude the counties from the scope of the Bill.
I realise that concurrent powers have sometimes resulted in friction between authorities. But I believe that the clear need to take effective action in our inner city areas, and the co-operation that this implies, make it necessary and desirable for the powers in the Bill to be concurrent. I might add that we need flexibility in the Bill to take account of local needs. Circumstances vary across the country. In some areas county authorities have taken the lead in promoting industrial economic development and in others the districts have taken the lead. This amendment enables the Bill to cover either case. We also need the extra resources that counties can bring to the problems of inner areas.
On industrial improvement areas in particular, the procedure for their


declaration requires one authority to consult the other before making the declaration. In the unlikely event of authorities failing to agree, the Secretary of State's power to negative the declaration of an area provides an opportunity for the dispute to be resolved.
We had an extensive discussion in Committee on the exact wording of this part of the Bill. It was suggested that it should read
and the council of the county or region which includes that district".
I gave an undertaking to examine the wording closely, and I have done so. I am satisfied that this wording does exactly what is wanted. The present amendment enables both tiers of local government independently to exercise the Bill's powers. It does not require them jointly to exercise the powers which the substitution of "and" for "or" would entail and it does not permit the Secretary of State to select only one tier for the exercise of the powers.
I am sorry to have gone on at such length. In these main amendments we seek to take notice of the representations that were made in Committee and elsewhere about clarifying the wording of provisions relating to industrial improvement areas as well as improving and extending the powers in various ways. I very much hope that they have the support of the House.

Mr. Michael Alison: I begin by thanking the Minister for his kind and courteous reference to the Committee proceedings, and I congratulate him on ensuring that the fair words have also buttered the parsnips. He has produced some solid changes as a result of the Committee proceedings.
If the debates in Committee enlightened the Minister, as he said, I do not want to be unduly partisan in claiming that if he looks at the column inches of print in the Official Report he will discover that most of the speeches were made by my hon. Friends and myself. I am sorry that there was not one Liberal on the Committee to help us in this improving process. Perhaps the Liberals will be able to help us a little today.
I want to question one or two matters and to probe a little the provisions that the Minister has put forward. I start by

concentrating on the reinstatement of the county, which is a very important matter. We had an interesting debate on it in Committee. The Opposition's decision to support the amendment of the hon. Member for Sheffield, Heeley (Mr. Hooley) to eliminate the county was based very much on the uncertainty we felt on studying the drafting of the clause and the meaning of "or" in the context. There was the question whether it meant "and" and so on.
The Minister has been kind enough to write to me and to other members of the Committee at some length, making the position crystal clear. But while reaffirming that we have no intention of resisting his attempt to reinstate the county, I ask the hon. Gentleman and the House to reflect a little on the real dilemma that we face.
In explaining to me and other members of the Committee why it was desirable that the county should have, as it were, collateral powers with the district, the Minister referred back to the form of words in the Local Government Act 1972, where the phrase "local authority" has a variety of applications, depending on the context in which it is used. But I think that it is also true to say that in that Act there are various schedules in which specific powers are allocated to specific local authorities, so that the interchangeability of the words "local authority" in that Act was rationalised by the fact that the specific local authorities had specified powers.
As I understand it, the difficulty here is that making the district council and the county council interchangeable activating authorities in the context of the Bill means that the county will be able to interfere and do things on its own initiative in an area which is normally the preserve of the district, an area in which, under the Local Government Act 1972, the district has designated, specified and exclusive powers. As a result of the way in which this Bill has been drafted, it will be possible for the county on its own initiative to make decisions affecting the local government district in which the district council has specific powers and in a sense to override it, duplicate it or take an initiative which is against its wishes.
There is a safeguard that the Minister has introduced in Amendment No. 39 which provides for consultation between


designated authorities. The Minister has said himself that there is a fail-safe mechanism within the narrow context of the declaration of industrial improvement areas in that the Minister's sanction must be secured and his veto can be exercised. If there is a real clash the Minister can step in and resolve it.
I do not think that this is totally satisfactory. If he has to step in to make a judgment of Solomon in respect of competing claims whether to designate an industrial improvement area, difficulties will arise. The county may want to designate part of a district and a district, for its own very good reasons, may not want that designation.
For example, Leeds City Council may, for very good reasons, not want an industrial improvement area in part of the Leeds district. The council—quite legitimately—might want to do its own slum clearance and to reinstate the area in a different way from the inner urban area philosophy. On the other hand, the West Yorkshire County Council may want part of the Leeds district designated as an industrial improvement area because it wants to built up industry and commerce in that area. The result would be a straight clash of views, and the county view would in a sense, override that of the district council. If the Minister comes in as a sort of Solomon, he is bound to outrage one side or the other and obviously it is not very satisfactory that we should provide for this kind of operation.
Clause 2 is even worse. It says that a designated district authority may be satisfied with
the acquisition by any person of land situated within the designated district or within the same county …".
It may be that the district council in a designated area, for reasons best known to itself, does not want a particular development to take place in inner urban area terms. It may not want a particular individual or group of individuals to come into that district and acquire land. If this occurs, that person or group wanting to acquire the land will go to the county, and the county, without any obligation to consult, can give its full range of support to that outside body, under Clause 2. This can be against the wishes of the designated district council.
There is no provision in the clause for consultation. This is a hazard, because there is a real likelihood of the county stepping in and taking the initiative which the district council wants to resist. There is a further paradox here. Although the Minister is responsible for designating districts under Clause 1, it is actually possible under Clause 2 for a county to launch the whole Clause 2 process in a non-designated district. The clause says:
the acquisition by any person of land situated within the designated district or within the same county …".
If the Minister has not designated a particular district, because it is in the same county, the county can still go in and start Clause 2 operations in a non-designated district. This is a very curious situation in which the county can short-circuit the provisions of Clause 1.

4.45 p.m.

Mr. Hooley: In fact, there is precisely such a collision of view in South Yorkshire at present. The county, for good reasons, believes that it should attack the serious problems of dereliction and unemployment in the Dearne Valley. It is giving this very high priority. On the other hand, the Sheffield District Council, not unnaturally, takes a somewhat different view of the priorities. It thinks that its own inner urban area problems should be accorded priority. If the county and the district have concurrent powers it is clear that there will be very serious collisions about the order of priorities. The possibilities for the county to be obstructive, unco-operative and awkward are virtually infinite. This is the kind of danger which my amendment in Committee sought to avoid, but which the Government are trying to bring back again.

Mr. Alison: I understand the hon. Member's point in relation to Sheffield and South Yorkshire. Under the Clause 2 powers there cannot even be a clash because the county has full powers to override the district and go ahead and make facilities available to entrepreneurs. It can launch Clause 2 powers in a district adjoining the designated district of Sheffield if it wants to do so.
There is a dilemma here because the country has an important contribution to make and because of this we shall not resist the new clause. However, the Minister must reassure us that he has thought through the kind of problem to


which the hon. Member for Heeley has referred. I hope that the Minister will consider the apparent looseness in Clause 2 and perhaps think about it again with a view to amending it in the House of Lords.
I move from the possible clash of interests to a couple of other points that I wish to make briefly on New Clause No. 2. We welcome the Minister's very helpful installation of the commercial dimension in the Bill. I am sure that this is right and I am grateful to him for listening to our arguments in Committee. I believe that this will make the Bill more powerful and effective.
I hope that the Minister will tell us how the scheme will operate in respect of New Clause No. 2. I draw his attention to the amounts of grant available here. The particular points are raised in Clause 3 (5)(a) and (b) where it says:
The amount of a grant under subsection (4)(b) above shall not exceed—

(a) 50 per cent of the cost of carrying out the works; or
(b) £1,000, or such other amount as may be specified in an order made by the Secretary of State, for each job which, in the opinion of the authority, is likely to be created …"

I put a hypothetical case by way of an illustration. Suppose the conversion of a building was likely to cost about £500,000. That is not an unreasonable sum in respect of a derelict large, old building which needs conversion and modernisation. Suppose that about 100 jobs were likely to result from the conversion—either new jobs or the preservation of existing ones or a combination of the two. On the basis of £1,000 per job, the lesser of the two amounts—50 per cent. of the conversion cost, or £1,000 per job—is £100,000 for 100 jobs. That is a long way short of 50 per cent. of the cost of converting the building.
It may be that some better balance can be struck here. What is not quite clear is the number of new jobs created which are relevant. For example, are the jobs involved in the construction firm engaged in the business of converting the building relevant jobs? If that is not so, I fear that the lower figure is always likely to be the one that will be chosen. The value of the jobs created is almost certainly likely to fall a long way short.

I fear, of the cost of converting some of these old buildings.
However, the Minister may be able to reassure us that he thinks that the figures are meant to be virtually interchangeable, so that one is not much of a loser by one or the other, and one gets about the same amount. I suspect, particularly if the jobs involved in the actual conversion process are discounted and one ends up only with consideration of new jobs or preserved jobs in a different kind of work, that there will not be enough incentive to get people to launch into a major conversion project.
Incidentally, will the Minister explain, in passing, why we are limiting ourselves to grants only in respect of this range of operations, the conversion, extension, improvement and so on, whereas for the amenities section it is to be grants and loans? It is a technical point. I do not quite remember from the Committee stage why we are limiting ourselves in this way.
I do not want to detain the House too long on points of detail, but I am afraid that it is inevitable when we are considering complicated new clauses and provisions. I should like, finally, to turn the Minister's attention to Amendment No. 39, just on a further point on the declaration of industrial improvement areas. It follows on from the change made in the new clause by which we have introduced the commercial dimension.
Why is it that, having introduced the commercial dimension in New Clause No. 2, we are going back to a form of words in respect of industrial improvement areas which seems, prima facie, once again to exclude the commercial dimension? We are confronted here with areas which would be predominantly industrial areas, as being those which can be susceptible to an industrial improvement area designation. But it is the heart of the argument about the commercial dimension that one may very well want to attract a general, mixed, balanced development of employment in a locality by majoring on commercial development, if that is relevant, or on industrial development—whichever is the most relevant to that locality.
It may be an inhibiting and limiting factor to say that one can carry out the commercial dimension, which is being brought forward in the new clause only


in an industrial area. In a sense, that seems to be a contradiction in terms, because a lot of the commercial attraction of coming into a particular locality in a district such as Leeds, for example, might well be that one does not want necessarily to settle in a predominantly industrial area for the purposes of building one's new office blocks and so on, but one would rather like to develop one's office blocks adjacent to—not too far away from but not necessarily cheek by jowl with—new factories that are being erected simultaneously.
It is difficult to understand why the Minister has insisted on reintroducing the concept of the predominantly industrial feature of the industrial development area provisions of Clause 3 when he has also given us the commercial concession, as it were. I can see some clashes arising here, because the commercial folk may very well not want to try to move in on an industrial area. It may be exactly the reverse of the kind of environment that they are seeking to create—for example, to attract white-collar workers. In a city such as Sheffield, for example, which has long been trying to attract white-collar jobs, to make it a balanced industrial and commercial environment, I am not sure that it would necessarily be helpful to be landed with this rather limited designation, as supplied in the change to the schedule in Amendment No. 39.
Those are the queries to which I immediately give expression on behalf of the Opposition. They are mostly queries, but my hon. Friends may well have other points to raise, so perhaps the Minister could give us a considered view of all these matters.

Mrs. Barbara Castle: I, too, welcome the changes set out in New Clause No. 2 and the extension of the provisions of the Bill to cover commercial buildings and the preservation of jobs and not merely the creation of them. But, of course, these extended provisions make designation even more valuable. That is why I am sorry that the Secretary of State is not present this afternoon to fulfil a promise that he made on Second Reading. In New Clauses Nos. 1 and 2 we are restating and slightly extending the basic provisions of the Bill with regard to the designation of areas

and the declaration of industrial improvement areas. We are starting again, as it were.
On Second Reading on 9th February, my right hon. Friend told us about the decisions and the selections that he had already made, the seven partnership areas and 15 other areas already identified for treatment under clauses such as these. He went on to say:
I envisage that a number of other districts with serious problems of urban decay will also be designated, and I intend to make a statement about this further selection of authorities during the later stages of the Bill's passage.
Today we are on the remaining stages of the Bill. My right hon. Friend is not here. I have no doubt that he has much pressing work to do. But it means that we are not getting the further statement that we were promised before the Bill leaves this House at this stage of its parliamentary passage.
The more I have studied the Bill and what my right hon. Friend has said, and, indeed, what my hon. Friend the Under-Secretary said this afternoon, the more vividly clear it has become to me that other areas qualify for this kind of assistance on the kind of criteria that have been spelled out during the discussions on the Bill.
Having listened to my right hon. and hon. Friends, I might have imagined that the Bill was almost tailor-made for my own constituency from the criteria that have been laid down and that we are repeating in the new clauses. Blackburn is certainly predominantly an industrial area. It is an area which has, tragically, suffered economic decline, which has left it with intensified social problems and considerable areas of dereliction. There is a population imbalance. Its unemployment rate is above the national average. As I think all hon. Members know, it is the centre of considerable racial tension. Indeed, it has been the centre of the leadership of the National Party in its campaign, and the chairman of the National Party was one of my opponents as a parliamentary candidate at the last two General Elections.
The racial tension is intensified by the employment problems and environmental problems from which Blackburn is suffering. It is struggling against a depressing physical environment. That is why, as long ago as last February, I wrote to my right hon. Friend welcoming his willingness, as


stated on Second Reading, to enlarge the number of authorities that he was prepared to announce as being designated, and asking him to realise that the problems of the inner urban areas are not confined to the large urban mass areas. The problems appear vividly in areas of smaller scale, which proportionately, have even greater urban problems.

Mr. Michael Morris: Is the right hon. Lady saying that the proportion of the problems in her constituency is greater than that of those in the centre of Liverpool?

5.0 p.m.

Mrs. Castle: No, I am not saying that. I am not trying to devalue the nature of the problems in Liverpool. I am saying that when my right hon. Friend on Second Reading said "I intend", he was not saying that he was merely considering. He said:
I intend to make a further statement about this further selection of authorities".[Official Report, 9th February 1978; Vol. 943, c. 1694.]
He was accepting the argument of some of us that in microcosm some of our constituencies have problems of almost equal intensity.
I give the hon. Member for Northampton, South (Mr. Morris) an example. In Blackburn we suffer from industrial dereliction in proportion to our population on a scale that is even greater than in some of the more dramatically derelict inner city areas. That is why I welcome the fact that my right hon. Friend realised that we are dealing not merely with one or two major cities but with a problem that is of the same sort as that in many other inner city areas.
In Blackburn we are left with the relics of the textile age. I cannot imagine any area that would be able to benefit more obviously, or would act more quickly as an industrial improvement area, than that part of my constituency where, lined up along the derelict side of a choked up canal, there are old mills that have fallen or are falling into decay. There are many examples to show that Blackburn has all the qualifications of an industrial improvement area.
In the post-war period my authority has done remarkable things to pull the town up by its own bootstraps. Thanks to

the Labour Government, we have had the advantage of being scheduled as an intermediate area. We have not been scheduled as a development area. I recognise that Merseyside would have prior claims over Blackburn in that respect. However, this Bill deals with inner urban areas struggling with the problems of dereliction and needing industrial revitalisation and environmental revitalisation, and that describes my constituency. We have done a great deal, and we are yearning to do a great deal more, given the powers, the opportunities and a little extra help. What we have achieved shows how much more we could achieve. We in Blackburn believe that there may be inner city areas that have already been scheduled and given powers but may not use them, whereas, Heaven knows, we would.
Will my hon. Friend the Under-Secretary of State convey to his right hon. Friend my regret that he has not been able to be in the Chamber this afternoon to announce the additional list? I shall forgive him, provided that he is actively and sympathetically considering adding Blackburn to the list.

Mr. Stephen Ross: I add my welcome to the new clause and the Government's conversion to my idea of including commercial buildings within the Bill's provisions. I referred to the matter on Second Reading and I have made personal representations to the Secretary of State. However, I congratulate those hon. Members who pushed the matter in Committee. If that had the effect that has been described this afternoon, it is to be welcomed.
The hon. Member for Barkston Ash (Mr. Alison) made some relevant comments about the contents of the clause. I have some queries to put to the Minister. When tabling my amendment I had in mind the mixed-use type of property that abounds in inner parts of London and elsewhere. In talking about London, let us take Covent Garden as an example. That is an area where a scheme to demolish a few acres has, thank goodness, been rescinded and where a fair amount of renevotion is taking place. It is to be hoped that in that area we shall be able to bring back some of the small businesses that flourished in years gone by. I recognise that some of them have never left the area.
I presented to the Secretary of State a case prepared by a local housing association that pointed out how it could create living accommodation over the many shops in the Covent Garden area by getting help from the housing corporation or from local authorities. It came unstuck when it tried to deal with the commercial sector, namely, the shops.
As hon. Members will know full well, that type of property does not lend itself immediately and appealing to insurance companies and pension funds. Those organisations always look for the first-class sort of investment. They regard secondary and tertiary locations as not being the type of investments for which they are looking. Very often such schemes are too small in size. Further, small businesses are often regarded as not being good covenants. Often small businesses are not prepared to enter into the pre-let arrangements that multiple companies find acceptable. The problem has been to provide help for those whom everybody would like to see succeed by getting additional finance to allow them to purchase. There has also been difficulty in dealing with the commercial side of the operation. There is help available on the residential side but not on the commercial side. I believe that the clause will meet that position.
The Minister has said that the clause will include shops. The hon. Member for Barkston Ash quoted some figures, and I have seen schemes that are in a fairly forward stage. In Covent Garden there are schemes ranging from £65,000 to about £500,000. If the money is to be restricted to the number of jobs that are created, there will be difficulties, but I take heart that in subsection (3)(b) there is reference to £1,000 per job created
or such other amount as may be specified".
We may visualise a service industry in that area doing a worthwhile job but not employing more than five or 10 people. If it is to be £1,000 per job created, £10,000 will not go very far in a scheme of anything up to £500,000.
I hope that the Minister will have more to say about that. Obviously, 50 per cent. of the cost of guaranteeing the work would be more than ample. It is probable that those concerned could get away with less and take a loan from one of the other sources that I have indicated, provided

that matters are well under way with the initial grant.
If that can be explained, together with the point that was raised on Amendment No. 39, which seems to contradict the commercial definition, I think that the clause will meet the point that many of us have been making and will go a long way to bringing in parts of inner London, Birmingham and other cities where there are literally hundreds of empty shops in inner urban areas that could be put to some other use—for example, manufacturing or servicing.
Such premises could be used for the repairing of wireless sets. They could be put to a useful purpose, but there must be the finance available to obtain such premises, renovate them and enable them to be offered at rents that people can afford. The initial starting finance has not been available. I see the clause as meeting that very desirable need, but if it is to be restricted to the lower amount, I do not think that it will go far enough.

Mr. Eddie Loyden: I did not have the privilege of serving on the Committee, but I have tried to follow what my hon. Friend the Under-Secretary of State and the hon. Member for Barkston Ash (Mr. Alison) said about New Clause No. 1. I welcome the moves that have been made in Committee and since to introduce industrial and commercial interests into the Bill. But I express some of the fears which have been advanced by the hon. Member for Barkston Ash about the conflicting interests and the problems which may emerge.
I do not want to argue the parochial attitude of Liverpool, because it is one of the cities involved in the inner area programme. Part of my constituency is also involved. There is a great deal of industrial decay and land left idle in my constituency because of the decline of industries in the area. There is also a need, because people desire to remain in the area, for a decanting system of housing. Looking at the possibilities of the twin interests pulling at the centre, I see conflicts arising and a certain amount of delay and argument occurring when those two interests are seen as not being complementary the one to the other.
We have to be cautious about allowing control of inner area policies and activities to extend into the more remote hands of the metropolitan county. The present agency arrangements could satisfactorily meet the interests of both the metropolitan county and district council. These arrangements have worked reasonably well when the county has acted as agent on behalf of the district or when the district has acted as agent on behalf of the county on the kind of work which requires collaboration. However, difficulties could occur if the interests of the county were in the commercial development of an area in which housing and so forth should have priority for available land.
Looking at the Bill as it has come from Committee, I think that to a large extent our expectations have been met. But I have one or two worries if the area of activity is to be extended. I should prefer to see the involvement of organisations which, in my locality, have already taken positive steps to involve themselves in thinking about and presenting the needs of the inner city areas in terms of industry and the refurbishing of the fabric of cities.
My right hon. Friend the Member for Blackburn (Mrs. Castle) referred to the designation of certain areas. I think that we should regard the inner area programme as being complementary to the other activities and designations which are taking place in industrial cities.
We see this measure not as an alternative to special development areas or to the other steps taken by the Government, but as complementary to deal with particular problems in some of our major industrial conurbations.
I hope that the Minister will pay due regard to the fears of people about widening activities, to the county and will consider what arrangements may be made for the district to be designated and for the county to act as an agent when required by the district. I think that would simplify the arrangements and overcome, to a large extent, the possibility of confrontation between the two authorities if there is no agreement on any particular project. I hope that the Minister will bear those matters in mind.

5.15 p.m.

Mr. Michael Morris: I think that the hon. Member for Liverpool, Garston (Mr. Loyden) made a particularly poignant contribution. I take the point that the solicitations from the right hon. Member for Blackburn (Mrs. Castle) may be valid, but I could probably make as strong a case for the derelict shoe factories in the centre of Northampton. However, that is not the problem that we face. The problem facing the nation is that some difficult inner city areas need the concentrated attention of the Government and Government money through the agency of local authorities. I think that the House would do well to concentrate its mind on that aspect and not to get deflected into the arguments of different constituencies.
I spoke on Second Reading, but I was not privileged to serve on the Committee. In a sense, I am somewhat disappointed at the large number of Government new clauses and amendments. We know that a number of detailed constultants' reports on inner city urban areas were prepared prior to publication of the White Paper. The new clauses and amendments seem to suggest that there was not the depth of thinking and preparation that there should have been. I suggest that this may lie at the door not of the Under-Secretary of State for the Environment, but of the Under-Secretary of State for Industry who, unfortunately, has departed from the Chamber.
Having said that, I welcome New Clause No. 2 and the addition of the word "commercial". I believe that the Under-Secretary of State for the Environment attended the initial meeting of the partnership area of Islington and Hackney. Therefore, he will know that unless "commercial" is added to that area, the whole concept will have no validity. If Islington and Hackney are to survive, they must survive as extensions of the City of London. It is in the general commercial concept—in terms of their office and quasi-office and craft context—that they are likely to revive as inner London boroughs. Therefore, the new clause is to be welcomed.
I think that the point made by my hon. Friend the Member for Barkston Ash (Mr. Alison) about the seemingly restrictive nature of AAA versus B should be


taken on board by the Government and, if not this evening, at least in another place, thought about very seriously.
I should like to comment on two other amendments. First, Amendment No. 22, which deals with the county councils. I find myself, not for the first time, in agreement with the hon. Member for Sheffield, Heeley (Mr. Hooley), as I was on Second Reading. I have the experience, which not many hon. Members have, of having a development corporation in my constituency. The lesson that all of us learn when we have a development corporation in a new town working alongside the district council and county council is that it achieves a single mindedness of approach to a problem. The buck stops at the development corporation. It the county and district do not combine and act—in my constituency they do—the development corporation can get on with the job.
The great danger that I sense—I suspect that the hon. Member for Heeley also senses it—is that if the county council is to be involved, no one will know where the buck stops. There will be consultations between one and the other and no decisions will be taken. If I were an industrialist who was asked to go into the deprived areas—for example, some of the derelict areas of Liverpool which I do not claim to know as well as the hon. Member for Garston, but at least I have taken the trouble to visit them—I should want to go to one office and know that I could get a decision and that no one would change it at a different level of local authority.
I understand that the county boroughs are chafing at the bit to get more decisions taken at district level. I believe that, despite having had the counties wiped out in Committee, the Government should pull them in again here on the Floor of the House.

Mr. Hooley: The matter is even more complicated than the hon. Gentleman suggests. Not only are the two tiers of local government involved, but seven or eight Government Departments. The size of the committees that will consider these partnership programmes is quite staggering.

Mr. Morris: The hon. Gentleman is quite right. Furthermore, he did not mention the fact that nobody from the

private sector has yet been invited to participate. If they were so invited, it would make those committees even larger. I believe that the chambers of commerce should be invited.
I do not sit for a Liverpool constituency, but I notice that the council there has a membership of 41 Labour, 41 Liberal and 17 Conservatives. That suggests that if one can get a decision out of the district council, that is enough for anybody.
I turn to Amendment No. 39, which is an important amendment with wide implications. It is a pity that the Under-Secretary of State for Industry has left the Chamber in this crucial debate, and I hope that somebody from that Department is taking note of this debate. I understand that the Government are saying that these areas must be designated as predominantly industrial areas. My experience in an older industrial town is that by far the most successful renovation of old shoe factories has taken place in non-conforming areas. They are no longer metal bashing factories or factories of a noisy nature. They have been changed to different forms of factory, but they are now renovated and are making a contribution.
The tragedy is that where an area has not been regarded as an area of dereliction and where old factories are still standing they may well be of a non-conforming nature, but what we must do in the Liver-pools of this world is to stop the rot. That rot has been setting in fast. Figures published in the Press today show that unemployment in Liverpool is rising, although it has fallen in the rest of the country.
I do not think that Amendment No. 39 addresses itself to that problem. We have to be single-minded and use every possible means to ensure that employment is stabilised in these crucial and desperate areas. If that does not happen, unemployment will continue. The amendment is good so far as it goes, but I urge the Government to examine these points, if not today, when the Bill reaches another place.

Mr. Douglas Jay: We are now dealing with a wide group of new clauses and amendments, and I welcome them so far as they go from the point of view of some of the London areas.
My hon. Friend the Minister does not need me to urge on him the seriousness of some of the problems of industrial dereliction and unemployment in the inner London areas. For these reasons the changes in the Bill are very welcome. However, from the point of view of those whom I represent in Wandsworth—and the Wandsworth Borough Council covers my area—the people there would have been glad to be granted even more concessions.
I wish to take up some of the points made by my right hon. Friend the Member for Blackburn (Mrs. Castle). I had understood that in the later stages of this Bill a statement would be made about the designation of further areas. The Secretary of State in a letter dated 1st March to the Wandsworth Borough Council made the following categorical statement:
I shall be making a statement about the further selection of designated districts during the later stages of the Bill's passage.
I do not know how much longer my hon. Friend expects the Bill to take in passing through Parliament. Those who served on the Committee will know the answer better than I do. The serious point concerns whether the Minister intends to make a statement today or at some stage in the Bill about the further designation of areas, because that is what we were virtually promised. Perhaps at some stage he will tell us when that statement will be made.

Mr. Guy Barnett: Perhaps it will save the House further trouble if I say something on this topic. This matter has been raised with justification by several hon. Members.
My right hon. Friend intended as soon as possible to make a statement about the full list of designated authorities. It is fair to add that if this Bill passes through this House today, it will then go to another place. I suppose one could regard that as the "passage of the Bill". I know that, if possible, it was my right hon. Friend's intention to make a full statement on the list by the time we considered Third Reading. Unfortunately, it has not been possible for him to do so because there are difficult decisions of judgment that still need to be made. I know that he hopes to make such a statement within a week or so, but not today.

Mr. Jay: If we can take it as an undertaking that a statement will be made while the Bill is in its passage through the other place, although we shall feel a little disappointed, we shall at least be reasonably satisfied.

Mr. Alison: I hope that the right hon. Gentleman appreciates that in pressing for designation of further areas, there is one small fly in the ointment. The resources available under the Bill have been predetermined and fixed. If further candidates wish to dip their spoons into the soup, there will be smaller helpings for existing candidates. There is an inhibition on the extension of the list.

Mr. Jay: I appreciate that, but as the area which I represent is to receive nothing at all, that argument does not carry very much weight with me.
This is not the place to argue in a parochial sense the place of particular areas. Nevertheless, in view of what was said by my right hon. Friend the Member for Blackburn and by the Opposition on the subject of Hackney and Islington, I must remind the Minister of the representations which have already been made to him. It is puzzling to many people in South London that he should have included in the partnership or designated areas the boroughs of Lambeth and Hammersmith and left out the whole of Wandsworth—an area that comes between the other two boroughs.
I shall not argue the case now because in his letter of 1st March the Secretary of State said:
While no final decision has yet been taken on additions to the list, I certainly accept that Wandsworth has a strong case for designation.
It will come as an acute disappointment to those in the area—an area which suffers a great deal of industrial dereliction and unemployment—if the Secretary of State fails to include Wandsworth in the list.

Mr. Anthony Steen (Liverpool, Waver-tree): Perhaps I may help the right hon. Gentleman. The problem is that the Government have refused to define an "area of special social need", despite attempts by the Opposition to elicit a definition. We tabled an amendment in Committee to identify an area of social need. It appears rather as a chameleon because it changes shape and moves round the country. Until the Government define


what they mean by that phrase, I feel that they will be making the wrong decisions and that the constituency of the right hon. Member for Battersea, North (Mr. Jay) will be neglected as a result.

5.30 p.m.

Mr. Jay: I understand that there is no definition, but in the past I had a good deal to do with scheduling areas as development areas, and although there was a general phrase in the legislation, there was never a precise definition. Nevertheless, I think that the areas selected received general public acceptance.
The particular problem in London at the moment is that there is no possible social, economic, statistical or other definition which could be produced to include, for instance, Lambeth and Islington but not Wandsworth. However, I do not wish to labour this point in that sense, because I think that my hon. Friend the Under-Secretary of State, who represents a South London constituency—and what is more a constituency bordering on the river, which is where many of the derelict areas are—understands the point perfectly well.
Although we are considering here the Inner Urban Areas Bill, there is also a Private Bill relating to Greater London Council powers, which is not before us this afternoon and which we cannot now discuss but which has some bearing on the proposals in this Bill. The point that I wish to make is that those in my area, including the local authority, attach very great importance to the powers in the GLC Bill. I hope that whatever further improvements are made here—and some have been made already—my hon. Friend will not use the argument that what he has done in this Bill is a good reason for not proceeding with and not enacting the powers proposed in the other Bill.

Mr. Steen: I think that the Minister must by now know some of the arguments that were deployed in Committee aimed at showing that in many ways the Bill was a puff of smoke, had no substance, and would be unlikely to help the areas which it was supposed to help. But in welcoming these amendments, I do not think that it would be constructive of me at this stage to attack the Minister on all the matters which I raised in Committee—certainly not at this stage, anyway.
I should like first to reiterate the points which have been made from the Labour Benches about the areas of special social need and the need to define a little more exactly why certain areas are included and other areas are not. We had a very interesting and lengthy debate on this very point in Committee, and the Minister will remember that I moved Amendment No. 2, hoping to identify the areas of need by specific reference to matters such as areas with unemployment above the national average, with housing stock older than the national average, with more than average lack of basic amenities, with earnings below the national average, with significant numbers of single-parent families, with indictable offences above the national average, and with more than proportionate numbers of unskilled and semi-skilled workers.
The Minister resisted any definition, and as a result that is the difficulty in which he will place himself and the Government as he gets more and more demands that one area or another should be included. I ask him to look again at the whole thinking behind the Bill, for unless he can specify the criteria by which he includes one area and not another, he may be choosing the wrong areas.
In my constituency, in Liverpool, as I have indicated in Committee, the needs are not in the inner part of it. They are on those vast, soulless council estates built by successive local authorities, and in which the social needs are far greater than in the inner areas. For this reason, the needs of the outer area are becoming synonymous with the needs of the inner area, if not overtaking them in that sense.
Perhaps the Minister will look again at the need to define the criteria by which help will be given. If he does not do this he will find that while he is fiddling, Rome will burn. While he is looking at the problems of the inner area, the population will be moving out, and there will be nobody left in the inner area. The real areas of social deprivation, these vast council estates—the sort of area which surrounds our major cities—will be neglected. That is my first general point.
The Minister's aim is to bring back industry and jobs to the inner areas. That is the whole thrust of this series of amendments and new clauses. The Minister will remember my comment about 80,000 jobs having been lost in the inner


area of Liverpool, to be replaced by 100,000 jobs in the outer area. I said that it is no good talking about reviving industry in the inner area unless we can bring back some of the skilled men who are now in the outer area. I do not want to deal now with the problems which will be created in the outer area by bringing these skilled men back into the inner area, but unless they are brought back there will be insufficient skilled labour to operate the small firms and businesses which the Minister is trying to interest in coming back into the city.
The Minister will remember that in areas such as Liverpool there is so much vacant and derelict land, belonging to the city council and to nationalised industries, that unless he can persuade these bodies to release their land holdings at a viable price, it will be no good offering grants and loans and assistance, because none of the small firms will be able to borrow enough money to buy the land which is hoarded by nationalised industries and local authorities, and which has been hoarded for a decade or more. In the event, the main thrust of the amendments and the new clauses would be lost.
It is no good offering people loans if the cost of the land is prohibitive. There is no point in offering them land on which to build factories if they have not the skilled staff with which to operate those factories.
I should like to draw the Minister's attention to a firm in my constituency which has written to me in exasperation, at a time when the Government are committed to a revival of the inner city and to creating more jobs and bringing new life to the inner city areas. The letter states:
We are a small manufacturing company employing…14 people. Our present premises, which are rented on lease, are becoming inadequate".
The company would like to expand its business and create new jobs. It has found suitable accommodation and would like to move. It was under the impression that it would be eligible for a Government grant for the purpose. However, it now learns that the grant is available only if it actually moves into a new building, and not if it moves into an old building.
I hope that the Minister, when he replies, will help me with the problems of

this company. It must be one of many such companies wanting to move from one building to another and unable to wait until the Government build an advance factory. In any case, the company would not be able to afford that.
Will the Minister deal specifically with the question whether the Bill will allow the company to move from one building to another, as it wishes, and whether the Government will help it to do so—or does it have to move into new premises in order to qualify for the grant?

Mr. Mike Thomas: I do not want to follow the hon. Member for Liverpool, Waver-tree (Mr. Steen) but rather some of the earlier speeches and particularly that of my right hon. Friend the Member for Battersea, North (Mr. Jay). I also come from a constituency which borders on a river and with very serious problems adjacent to it, as I think he well knows, and I have studied the GLC Bill, to which he referred.
I recognise that the present position is one of very great difficulty. I do not say this in any spirit of "Pull up the ladder, Jack—Newcastle is all right". That is not the feeling I have. It is simply that with the Inner Urban Areas Bill, the GLC Bill, the Act dealing with the Tyne and Wear, and so on, we are getting into the most almighty confusion about inner area support of various kinds. We ought to bear that in mind, perhaps, when looking at the provisions of the Bill.
As the Minister will know, I served on the Committee. It would only be right to give an unreserved welcome to the changes proposed in New Clause No. 2 in particular. Both from the point of view of the co-operative movement—whose interests I represent in the House—and from the wider purview of the retail trade—with which I share the distinction of being a member of the all-party group with the hon. Member for Hampstead (Mr. Finsberg)—the provisions, including commercial buildings, are very welcome indeed. We are grateful to the Government for them and for the amendment of the hon. Member for the Isle of Wight (Mr. Ross) with regard to the precise definition to be used for the word "commercial".
I know the perils of quoting one's own speeches, but in this instance it is perhaps


justified. While thanking the Minister for this major concession, I would draw his attention to the speech that I made in Committee when I said:
If my hon. Friend
—in this case I was referring to the Under-Secretary of State for Industry—
says that this is the thin end of the wedge, I say in reply that that is precisely what I intend. I want that wedge to be in and the gap to be opened up. I do not hide that. I say it straightforwardly to him. It is a very tiny wedge, with a very tiny end, and it has been inserted a bare millimetre."—[Official Report, Standing Committee A, 16th March 1978; c. 399.]
That was certainly the case with the original amendment in Committee.
It is fair to say that the millimetre has become at least a centimetre, possibly a little more, by the inclusion of New Clause No. 2. However, when replying to the debate can my hon. Friend perhaps give some hope to the distributive trade that this particular development signifies a change in the Government's thinking. Can we hope that this is a real change of heart? I hope that we shall now see a genuine conviction on the part of the Government that distributive and retailing activity is just as important—not only in inner cities—as the creation of jobs in manufacturing industry.
I shall not rehearse all the arguments again. I said in Committee, as did my hon. Friend the Member for Woolwich, East (Mr. Cartwright), that a man who drives a fork lift truck and puts pallets in a heap—whether he is doing it in the warehouse of the North Eastern Co-operative Society or in the workshops of C. A. Parsons Ltd in my constituency—is still a man doing a job, being paid a wage and supporting his family on it.
This is a welcome change in the direction of ending the discrimination that we have seen against the distributive and commercial sector. I hope the Minister can give us some assurance that this will be extended and that this small measure we have today is not the extent of it.
I want to refer to one other matter. In this regard I believe that the hon. Member for Barkston Ash (Mr. Alison) and Isle of Wight have rather missed the point. I refer to the question of jobs. Of course, the provision in the Bill is there and, of course, it is intended to relate the grants to jobs precisely because

one of the concerns we have about almost all other forms of assistance to industry is that at the end of the day they help most of all the capital intensive industries. We know that we do not particularly want capital intensive industry in inner urban areas. We do not want major chemical plants or oil refineries, or other plants of the sort that have done rather well under the regional assistance schemes. We want smaller operations that will provide genuine jobs.
I make no complaint about the provision relating to the number of jobs to be created. However, I think that the hon. Member for the Isle of Wight missed the point. I very much welcome the inclusion of jobs to be preserved.

Mr. Stephen Ross: I do not disagree with the hon. Gentleman's comments, but does he not think that £1,000 per job will be far too low a sum to enable some of these commercial developments and renovations to take place? After all, he is welcoming it on behalf of the retail trade. I have no objection to this being related to jobs. I agree with that entirely. But £1,000 is mentioned, and if that is the sort of sum which the Secretary of State has in mind, I am afraid it is peanuts and just will not work.

5.45 p.m.

Mr. Thomas: With regard to these matters, a balance has to be kept. The object is to go for projects that are to some degree labour intensive. If the amount of money available per job goes up too dramatically, again one gets back into the business of encouraging capital intensive operations. A figure of £1,000 may be too low—no doubt many of us would wish that it was £2,000, £3,000 or £4,000—but there has to be a question of balance.
I should like to ask an important and detailed point which we did not seem to deal with properly in Committee. What exactly is a job? The Minister shook his head when it was suggested that construction jobs would be included. He will know that in the area I represent, as in other development areas, there is very great concern with regard to people receiving grants having their operations in existence for a short time—perhaps one, two or three years—and then in time of difficulty closing down the plant in the assisted area and withdrawing to their


central headquarters which may be somewhere else. We know that there is some mythology about that. It perhaps does not happen as often as some people think. Nevertheless, it is a genuine concern. It seems to me that by putting the business about jobs into the Bill the Government are inviting the question, what do they mean by this provision?
If in reply the Minister were to say that there will be a general relationship to some general calculation about how many jobs are created or preserved, that is fine. But I would then say to him that I am not entirely sure that I see the point of putting it into the Bill in this form. If he does not say that, then some more detail must be given to us. If it is not construction jobs, is it jobs that are created for a year, two years or five years? Will there be a time limit? The Minister knows the sort of questions that I have in mind. I hope that in his reply he will cover them rather more fully than he did at the outset.
I repeat the welcome that I gave to the amendments and new clauses that we are now discussing. We are grateful for them. We know the work that my right hon. and hon. Friends have put in to take account of the points that we made in Committee. The response we have had is magnificent and direct, and we much appreciate it.

Mr. Timothy Raison: The two points made by the hon. Member for Newcastle upon Tyne, East (Mr. Thomas) are both valid and relevant. The first was to stress the importance of the retail industry. I am sure that that is absolutely right. The second was to ask exactly what is meant by "jobs" and whether New Clause No. 2 refers to short-term jobs or long-term jobs. That is also a point on which I should like to hear the answer.
I should like to say a little more about jobs. I am not sure that what I want to say will be welcomed by every hon. Member. I accept the need for inner city policy and for public resources to be directed to bringing about some kind of effective inner city policy. I also accept that the key to a successful inner city policy must be some kind of economic revitalisation in the area concerned.
There is a school of thought which says that one cannot hope ever to make these areas into reasonably dynamic areas in terms of their contribution to the national economy and that one has to regard the inner city areas as being areas of dependence on the rest of society. There are quite plausible and rational arguments for putting forward that point of view, but I believe that it would be a disastrous point of view to put forward. Above all, it would be disastrous because of its effects on morale.
I accept that we want to think in terms of economic revitalisation. I also accept the point that small businesses have an important part to play in these areas, if we are to bring that revitalisation about. But the note of warning I should like to sound is that I do not accept the case for continuing job subsidisation or for creating wholly dependent economies. I do not accept the case for shoring up the obsolete or even the obsolescent. There is a real danger that the kind of provisions embodied in New Clause No. 2 could be used for these purposes.
It might not be a declared statement of policy on the part of the Government, but I believe that the risk exists. There is already in this society an exaggerated creation of what I would describe as bogus jobs. I feel this particularly strongly because there are so many genuine things which still need to be done in our society if only we could afford to do them. So I hope that when New Clause No. 2 talks specifically about providing £1,000 or whatever it may be to create jobs, it will not be interpreted as a licence to create jobs which are not genuine jobs in their own right.
There are many arguments against what I describe as phoney jobs—jobs which are not justified by their economic contribution to society. For one thing, they reinforce the poor productivity which is the scourge of the country's economy at the moment. From time to time, the Prime Minister says that he cannot understand why productivity is not going up because, after all, more people are beginning to be in work. But he overlooks the fact that so many of the people now in work are not fulfilling productive jobs but are there as part of a job creation programme. Although it may be that in the short term there is a case for some of them, in the long term there is no case


for them which solves either the country's problems or those of the inner cities.
If we mishandle this kind of policy, there is a risk that we shall lead people to despise work. If we create jobs which are not valid jobs, people may say "This is not really a serious operation. It is a way of getting a bit of money at the end of the week." But I believe that it can help further to undermine the forces in society which are already causing a lot of our trouble. However, I do not think that it will check the demoralisation in these areas to create bogus jobs. What is more, of course, it will waste resources. As I have said already, there are plenty of things which need doing. To use resources purely for job creation is a waste of resources which can be applied elsewhere.
I hope that the Government and the local authorities will bear in mind these lessons and see that what they have to do with the aid of this Bill and New Clause No. 2 in particular is to create what I describe as a real inner city economy. To some extent, this will be done by measures quite outside the scope of the Bill and quite outside the scope of the local authorities. It will be done by our general tax policy, our general planning policy, and so on. Probably all of us will admit that those factors will have much more to do with the strength of our inner cities than any specific inner city measures will ever have.
The question is whether I am being very depressing and damping to the possibility—[HON. MEMBERS: "Realistic."] My hon. Friends say that I am being realistic. I think that that is right, but I also think that in some ways there is more opportunity in the inner cities for genuine economic revival than some people give them credit for. There are realistic opportunities, and I have been struck, when talking about them to business men as well as to others over the past year or so, by the fact that quite often business men are more optimistic than some of the academics and other pundits. However, they are optimistic only if the principle adopted is a realistic horses for courses principle rather than a generalised and unthought-out principle of saying "Let us have jobs for the sake of jobs".
I take the well-known example of the dockland area of London. That is an

excellent example of an inner city area. I am struck by the fact that one business man to whom I have talked, who is concerned with development, and so on, makes the point that at the west end of the dockland area at any rate there is a great deal of scope if one says, roughly speaking, that it can provide a cheaper version of the City of London. It is very near the City of London, and a lot of businesses like being in or near the City of London. What deters them from being in the City of London is that they can get there only at very high cost in terms of rent and so on. The dockland area lies immediately beyond the City and, if we could find a way of enabling rents to be reasonable in that area, I can well believe that it could have a considerable commercial attraction for a number of firms. I give that as just one example of the scope for horses for courses policy.
When we are talking about the kinds of businesses which may be appropriate for inner city areas, there are a number of other factors at which we must look. It must be said that one of them is wage levels. We have to accept that in some parts of the country businesses have been priced out of inner city areas partly because wage levels have been pushed up to an unrealistic height. That is a fact. Another one is the problem of land prices. This will come up in a later debate, but I am sure that it is critical to the revival of our inner city economies and that we have to find a way of breaking out of the present absurd situation.
There are two specific measures about which we should be thinking. One is the simple and basic market measure of seeing whether we cannot get land auctioned off, especially publicly held land. That provides the best possible chance. To go back again to dockland, we all know that the Port of London Authority and the gas board are sitting on great tracts of land for which they have no real use and which they are not selling largely because of the Community Land Act and its adverse consequences but which they sit on in any event because public bodies love sitting on land. They cannot bear parting with it. They are very good at inventing spurious reasons why they might want to use it one day. But I do not think that they have genuine reasons, and a bit of chivvying and firm action on the part of the Government could force them


to disgorge land. I think that the best way of getting rid of it is simply to auction it so that it goes to people who want to make use of it.
Failing that, there is a case for what is called the reduction factor—the introduction of a "no hope" element in land values which would say realistically "This land will not get anywhere unless it is brought into operation as part of an inner city policy. Therefore, let us accept that its value is less than the value attributed under current valuation procedures." That could help to get the inner city economies going, and it is that sort of area at which we should be looking.
Obviously it will help if we have labour intensive employment. But I do not think that we can carry that too far as a dogma. Provided that the wage rates are not too high, labour intensive employment will often prove to be the appropriate form of employment as well as being beneficial to the local population. By and large, it will be good if these forms of employment are directly consumer oriented rather than what might be described as old-fashioned industry oriented. Obviously, it will be advantageous if they employ women, numbers of immigrants and numbers of not very skilled people. I sometimes think that the prototype inner city firm is Grunwick, which meets all those criteria.
If we are realistic about this and we allow natural forces to operate, perhaps with a little encouragement here and there, we shall do very much better than we shall by adopting the generalised notion that jobs should be created and maintained at all costs.
How does this come back to New Clause No. 2? I am not saying that I am against the clause. I do not think that it is a mistake to write it into the Bill. However, this provision about job creation in it has to be watched with the very greatest care. If this Bill turns out merely to be a job subsidisation effort, I do not think that we shall help the inner cities. Instead, I think that we shall perpetuate the demoralisation and economic decay which afflict them, and we shall be barking up completely the wrong tree.

Mr. Geoff Edge: I intend to confine my remarks to New Clause No. 2. Although the reference

to commercial buildings is to be welcomed, I do not think that it goes nearly far enough. Underlying the Government's thinking there is still the mistaken notion that we can attract back into inner city areas manufacturing employment which will generate new jobs and a new inner city economy.
At a time when the number of manufacturing jobs in the long term, is falling in all the developed countries, it is an illusion to believe that we can attract manufacturing industry back into the inner cities on a substantial scale. That does not mean that some firms, especially small firms, cannot be encouraged to locate in the inner city areas, and I see that later today we shall be discussing an amendment designed to help small firms. The fact remains that the economies of our inner cities are more and more dependent on commercial activities rather than on industrial activities.
Hon. Members may ask why I quibble about commercial buildings being included in the clause. I do so because they have to be commercial buildings in industrial improvement areas. There are many areas in our great conurbations where whole town centres, predominantly commercial centres, are decaying. Is it the case that because these areas cannot reasonably be classed as industrial improvement areas they will be denied aid? Will these areas of commercial decay be able to benefit under the new clause in the same way as industrial areas? If the answer is "No", the Bill's impact will be very small indeed. We cannot possibly hope to revive the inner cities without encouraging a considerable growth of commercial activity.

6.0 p.m.

Mr. Steen: Following the hon. Gentleman's argument, would one not have to rejig regional development aid? At the moment, it is geared to building on green field sites and creating jobs there, which militates against rebuilding the inner city community, with all that derelection and vacant land. Unless one rejigs regional aid, the Bill will make no contribution to rejuvenating the inner cities.

Mr. Edge: I agree with the hon. Gentleman completely. What is needed is a re-examination of regional aid so


that it considers not only the economies of regions but the great disparities within regions. The contrast between the poverty of the inner cities and other parts of a region can be just as great as that between an area in the South-East of England and the development areas. That sort of fallacy still underlies much of the Government's thinking, not only about the Bill but about their whole regional economic policy.
I should like an assurance that the Minister will define—there is no definition in the Bill at the moment—an industrial improvement area so that commercial areas which are in decay can benefit as much as predominantly industrial areas. Without that assurance, the effects of the Bill will be very limited.

Mr. Andrew MacKay: I support the hon. Member for Aldridge-Brownhills (Mr. Edge). Many areas which are in need of attention are not included among the designated areas. My own constituency of Stechford has been left out of the designated area within Birmingham, yet some parts in the Alum Rock end of the constituency have areas of terrific deprivation, particularly where commercial enterprises have left and nothing has replaced them.
I, too, congratulate the Minister on bringing commercial enterprises into the Bill. Is this a change of policy? Several hon. Members have rightly said—I do not think that we are misinterpreting Government policy—that in the last few years commercial enterprises have not been encouraged as much as manufacturing and industrial enterprises. Many of us regret that, for two reasons in particular.
First, the Bill's objective—we all agreed this in Committee—is to encourage jobs in the inner cities. I believe that as many new jobs could be gained in the commercial sector as in the industrial. Throughout the country, therefore, it is just as important, if not more so, to encourage commercial enterprises.
Secondly, the growth areas in our economy and in other industrial economies are not so much in manufacturing as in commercial areas. So if we are looking for real jobs—not artificial jobs, but jobs that will last—we must look more to this sector.
Another objective of the Bill is to encourage people to return to the inner cities. People have left most cities in great numbers. This is unfortunate. Apart from the resulting dereliction there, they have to live somewhere else. Again and again, decent countryside and ex-green belt land has been used unnecessarily for development and house building. We should have encouraged both private and public builders to build in the inner cities.

Mr. Steen: Has not my hon. Friend put his finger on the point at issue in the Bill? He is talking about the demolition of the inner cities by the local authority which resulted in this mass exodus of the inner city population in the last 10 years. The question is how to get those people back. Surely, unless the Government say something about the artificially high land values caused by hoarding by public authorities after demolition programmes, whatever is done about industry or jobs will have no effect, because that land is locked into the public sector. Surely that is the key to this argument.

Mr. MacKay: As usual, my hon. Friend, with the far-sighted vision which the House has always recognised in him, has beaten me to it. I had intended to make that point. To continue on the theme of encouraging people back into the inner cities, we shall not get people to live there voluntarily without plenty of facilities, including good shops and plenty of jobs. The two must go hand in hand.
We shall not solve any of these problems in this Bill or by other means until we solve the problem of the high cost of land in many of our cities. I am afraid that much of that land is owned by State bodies—local authorities, the Government or nationalised industries. For various reasons, they are hanging on to it. One reason is the Community Land Act and the development land tax.
But there are other reasons. First, as my hon. Friend the Member for Aylesbury (Mr. Raison) said, these bodies are very acquisitive. They like to hold on to land and have no incentive to sell. The Government should give them such an incentive. They should instruct them to sell, preferably by public auction.

Mr. Edge: To whom?

Mr. MacKay: I believe that at public auction the land would go to many construction companies, which would be only too pleased to have a profitable venture to build factories or houses within the city. Alternatively, the local authority could do the same. Declaring an interest, as a builder in Birmingham, I believe that private enterprise would do it more cheaply and effectively.

Mr. Joseph Dean: Is the hon. Gentleman aware that before the Community Land Act land values in the inner cities on normal slum clearance rocketed to astronomical heights when the market was left free and prices were supposed to level out? Under that system, prices went to all-time records. Would not the effect of returning to that system, as the hon. Gentleman suggests, be the same?

Mr. MacKay: I do not think that the hon. Gentleman has taken that argument to its logical conclusion. There was a boom then, but prices later fell again. The reason that they have gone up again now is the shortage of land because of the Community Land Act, brought in by the hon. Gentleman's Government.
We must encourage all State bodies to sell land in the inner cities so that this Bill, which I have broadly supported in Committee, will be effective. I know that we will all appreciate hearing from the Minister on this point and about further encouragement to commercial enterprises, not just in the designated areas but in other areas which need assistance.

Mr. Hooley: The grouping of the amendments has made the argument somewhat diffuse, but I want to concentrate on one point touched on by the hon. Member for Barkston Ash (Mr. Alison), my hon. Friend the Member for Liverpool, Garston (Mr. Loyden) and others. This is an argument about the designation of one tier or two tiers as the effective partnership of programme authorities for the central Government in carrying out the purposes of the Bill. This argument was raised in Committee. I argued then that the districts were disignated and that it was undesirable that there should be confusion of responsibility between the two tiers of local government. It is well known that the present system of local government is regarded as highly unsatis

factory and as having caused many problems since it came into effect.
One of the major problems has been the overlapping of responsibilities between the two tiers on matters such as planning, highways and recreation. In the Bill, the Government are perpetuating this kind of difficulty, storing up a lot of trouble for themselves and undermining the effectiveness of what they want to achieve. I fully support what the Government want to achieve. I support many of the amendments in this group through which the Government are trying to improve the Bill. There is no quarrel on the main principle. However, on the mechanics of it, I remain unconvinced that it is sensible or efficient to have dual responsibility—apart from the fact that about half a dozen or a dozen Government Departments are involved at central level and they will have to negotiate with two tiers of local government.
This is not a personal eccentricity of mine. It is not a whim, or an academic argument; it is a real fear on the part of one of the great cities of this country which I have the honour to represent—namely, Sheffield—that concurrent powers would diminish the effectiveness of the Bill. There has been much friction in the past about concurrent matters, and there will be friction in the future if the Bill is enacted.
The Committee, perhaps reluctantly, agreed with my view. It took out the provision relating to the concurrent arrangement and agreed to an amendment that I proposed. Unfortunately, in Amendments Nos. 3 and 22 the Government are asking that we should go back to the original very unsatisfactory position. Oddly enough, the hon. Member for Barkston Ash seemed earlier to underline my argument. He pinpointed the various difficulties—not only in Clause 1 but in Clause 2—which will arise if we continue with this concept of concurrent powers. He went on to say that he would nevertheless accept Government Amendments Nos. 3 and 22. I am sorry that he has had as much difficulty in making up his mind in the House as he did in Committee—though in Committee he came to the right conclusion in the end, so it is possible that I shall be able to persuade him to come to that conclusion again and oppose the amendment. There is no dispute in any part of the


House that the Bill is concerned with inner urban areas. We are concerned with the central part of the major cities of England and Wales and, possibly, Scotland.
It is clear that the authorities which have the direct day-to-day responsibility for the problems of the major inner city areas are the district councils. In certain metropolitan areas they are concerned with housing, personal social services and education, which will impinge greatly on the rejuvenation of the inner cities that is to be accomplished partly by means of the Bill.
6.15 p.m.
I do not know what advantage will be gained by complicating the administration and consultation process by dragging in the county authorities. As was pointed out, cogently by the hon. Member for Barkston Ash, it appears, if his construction is correct, that in some cases counties can take the initiative and interfere with the inner urban areas on certain matters, contrary to the interests or the wishes of the district councils concerned. That is unlikely to happen, though, judging from some of the friction that has arisen between the two tiers, it is not entirely out of the question. Nevertheless, there will clearly be a built-in possibility of conflict and friction if the Government reject the wisdom of the Committee and insist on reverting to the original arrangement.
This is not a personal eccentricity of mine. The authorities in South Yorkshire—Barnsley, Doncaster, Rotherham and Sheffield—made a clear statement of their views. They said:
The problems of the inner urban areas are concentrated in relatively small geographical areas and the solutions to the problems should lie within the district council. It is the district council which has the responsibility for the local plan exercise within the framework of the county council structure plan.
The types of problems to be found in these areas include industrial and housing obsolescence and a declining population faced with social and personal difficulties associated with the lower income groups. The need is to make these communities more prosperous and industrial regeneration is one of the keystones of this policy. An energetic district council is in constant touch with the existing industrialists within their area and is able to respond quickly to approaches made by prospective developers.

I echo the comments that have been made that if a business man has to become involved in arguments with a district council, a county council, the Department of the Environment, the Department of Industry, the Department of Transport, the Treasury, and so on, by the time he has gone through that rigmarole he will have lost interest, or forgotten what he intended to do in the first place. The statement from Sheffield and other authorities continued:
It is strongly conteded that in metropolitan areas only district councils should become designated districts. If county councils were also to become designated authorities, the difficulties which have arisen in South Yorkshire in the exercise of concurrent powers would be likely to be extended and intensified with results that would probably hinder rather than assist in overcrowding some of our local problems.
There is considerable force in that argument. I have already mentioned the powers that districts have—metropolitan districts at any rate—in housing, education, social services and local planning. But there is a strong current of opinion that certain powers should be switched from the counties to other cities not in the metropolitan areas, such as Nottingham, Derby and Hull, which lost their status of borough counties under the new arrangements. It is now generally believed that they should take back some of the old powers that they had in housing and other matters.
Whether or not Conservative Members accept this trend, the trend exists. The argument will be difficult to resist. It is fantastic that there should have been taken from great cities such as Nottingham, Derby and Hull powers which they exercised effectively for years, and that those powers should have been given to some more remote county authorities.

Mr. Raison: The authorities to which the hon. Gentleman refers have housing powers.

Mr. Hooley: My information is that the counties have the housing powers. I may be wrong. There are other powers which these cities want restored to them and which, I believe, in time will be restored to them. That will strengthen the case for having one tier instead of two tiers involved in administration of the Bill.
The Bill recognises the problem because in Clause 7 on the subject of planning it is suggested that on certain planning points the district can go ahead even though the structure plan of a metropolitan county has not been approved by the Secretary of State. The Bill acknowledges that there is a difficulty in a concurrent power system and tries to overcome it by saying "We shall allow them to ignore the statutory power and the statutory procedure which the upper tier, in strict terms, possesses."
I have some evidence that other authorities besides South Yorkshire share this view. I understand that they include Leeds, Liverpool, Bolton, Sunderland, Nottingham and Oldham. If that is correct, we have in Leeds, Sheffield and Liverpool, three of the greatest cities outside London in the United Kingdom supporting the argument.
I have received a letter from the chief executive of Sheffield, saying:
My understanding is that the Government will seek to reintroduce concurrent powers on the basis that, firstly, economic development for inner city areas requires co-operation and co-ordinating action between the two tiers of local government. Secondly, that in some areas county authorities are very active in promoting industrial development and, thirdly, that more resources can be brought to bear when county authorities are involved. These arguments suggest to me that government have entirely missed the point that we have been trying to make. The whole history of concurrent powers, particularly in relation to industrial development and promotion, shows that the keenness of both tiers of local government to get involved leads only to confusion, conflict and duplication.
That is not the argument of a politician; it is an argument put by a man who has executive responsibility for running one of the biggest cities in the United Kingdom. His considered view is that the provision that the Committee deleted would have been likely to lead to serious difficulties, and that it would be much better to have a one-tier arrangement.
I welcome many of the Government's amendments, but I cannot accept that Amendments Nos. 3 and 22 are necessary or desirable. I believe that the Committee was wise to alter the original form of the Bill.

Mr. Geoffrey Finsberg: This has been a long and interesting debate on a collection of items, and I start with

three specific questions so that the Minister will have time to get the appropriate advice before he applies.
The first question concerns the concurrent powers given under the proposed amendments to designated authorities. Will it be possible for an applicant to go first to a district that is a designated authority to obtain a grant or loan and then to go to the county which will, by then, have become a designated authority with concurrent powers? As far as we can see, there need be no consultation on individual applications to designated authorities, and the amendments appear to give complete discretion, within the figures, to the designated authorities without the need to refer back to the Minister.
Secondly, I should like to refer to our proceedings in Committee. I asked the Under-Secretary of State for the Environment whether, if he were going to exercise certain powers under this schedule which were, in general, the opportunity to revoke a particular proposal, he would at least say that the decision would be taken not in his name, but by a Minister himself. He replied:
I shall certainly consider it with a view to trying to respond to the hon Gentleman later."—[Official Report, Standing Committee A, 9th March 1978; c. 307.]
I hope that "later" will be today, and I should be grateful if that point could be clarified.
My third question concerns the position that will arise if the hon. Member for Sheffield, Heeley (Mr. Hooley) fails when he divides the House—I cannot assure him of our support—and the amendments to which he is opposed are passed. I take the hypothetical case that my hon. Friend the Member for Barkston Ash (Mr. Alison) has put on various occasions, namely, West Yorkshire, which is a county, and Leeds City. I understand that if there is a disagreement on a proposal that originated from the city, no cost would fall upon the county.
However, if there is a disagreement and the city is overruled and the county proceeds, am I correct in assuming that the precept put upon all the authorities within West Yorkshire will fall not merely on Leeds—which, having objected to having a particular section designated, will still find that it has to pay—but upon all the other authorities on which West Yorkshire


would precept during the rateable years when the payments have to be made?
I welcome the repentant sinner and I shall be quoting at length the words of the Under-Secretary of State for Industry, because he was clearly utterly opposed to any intention of widening the definition in the Bill to include commercial activities.

Mr. Mike Thomas: The hon. Gentleman is being most unfair.

Mr. Finsburg: I do not wish to be unfair. If the hon. Member for Newcastle upon Tyne, East (Mr. Thomas) wishes to defend the Minister, it would have been helpful to the Minister to have had his support at an earlier stage in Committee. The hon. Gentleman was also a late sinner, but I was not going to quote him because, in the end, he voted correctly and helped us.

Mr. Mike Thomas: I ought to inform the hon. Gentleman that my conversations with my hon. Friend the Under-Secretary do not accord with the hon. Gentleman's comments. I found a ready response and I am glad that the matter has turned out as it has.
The hon. Gentleman's approach is a little churlish. I hesitate to describe his attitude to me as churlish, since I may be thought to have some direct interest in the matter, but he knows that I was unable to be at the Committee on the first occasion when an amendment was moved because I had to be in my constituency. I made clear before and after that occasion that I had not wished to be absent, but that I had no choice. Indeed, I think that the hon. Gentleman was good enough to accept that, and it is a little unkind of him to return to that theme.

Mr. Finsberg: I had not intended to include the hon. Gentleman in my remarks, but, by trying to defend the Minister, he brought some of this on himself. However, I shall not pursue him.
The Under-Secretary of State for Industry said in Committee:
It would be anomalous if assistance were to go to all commercial activities in the inner cities, including inner cities in the non-assisted areas, but not to those activities in the assisted areas generally, but which must continue to have priority. That is why I am most reluctant to go beyond what I think is a generous definition."—[Official Report, Standing Committee A, 7th March 1978; c. 246].

In fairly similar words, he repeated that opposition on two later occasions. There was no movement at all and when we gained our minor victory the Committee voted against the Minister's advice.
6.30 p.m.
In this way and in the Minister's whole attitude in Committee we had little or no help. As I shall show later, he paraded before the Committee his well-known antipathy towards the EEC when we were discussing the amendment to save jobs. But he is never prepared to stand up and do this in a way that would mean that he might have to choose between his views and his Government portfolio. I was trying to persuade him to say this more clearly. We often suffer because the hon. Member makes remarks from a sedentary position. I was giving him the chance to say something, but I see that he does not intend to rise.
It is important that we get the facts on the record. I echo what my hon. Friend the Member for Barkston Ash said earlier. We have had nothing but co-operation from the Minister from the Department for the Environment, who understands these problems.
The hon. Member for Isle of Wight (Mr. Ross), who supported our view about commercial operations, was not, alas, on the Committee. But the representative of the non-official Opposition shared our view. That was one reason why we were able to register one success on this issue. I welcome the robust view taken by the hon. Member for Isle of Wight. We thought that the idea would help to attract industry back to the inner cities. As my hon. Friend the Member for Ealing, Acton (Sir G. Young) said at length, if one converts old factories into new places of work but nearby there is nowhere to shop, there will still be a derelict wilderness. That was one of the reasons why we tried to introduce opportunities for service industries and commerce. This has certainly improved the Bill.
The right hon. Member for Blackburn (Mrs. Castle) chided the Secretary of State for not keeping his promise to announce his further list of authorities to participate in the pork barrel. We had a fair answer from the Minister, when he was pressed by the right hon. Member for Battersea, North (Mr. Jay). I am surprised that neither of those right hon.


Members realised that if there was to be an announcement, the timing would be more suitable and that it would be made a day or two before 4th May instead of being lost during the Report stage today. I hope that I am not assuming anything, but I shall be surprised if this list is not announced a day or two before 4th May, in the hope that it will have some effect on the local elections in those areas that are having elections.
I noted what the right hon. Member for Battersea, North said. He does not mind depriving Lambeth or Hammersmith of its limited share if Wandsworth gets something, because it now receives nothing. That is what the right hon. Member said in answer to an intervention. I understand his feelings. I could make the same case and demand that Camden be included because Hackney and Islington are to receive money and Camden is not. But one should not be so ungenerous in a limited Bill when there is a limited amount of money. One should not try to deprive one area in an attempt to get a slice for oneself.

Mr. Jay: The hon. Member is being unnecessarily provocative. That is not what I said. I said that similar areas should have similar treatment. I should have thought that he would agree with that.

Mr. Finsberg: I do agree, but there is no provision for more money. If there were 40 areas sharing £80 million and one added another 40 areas, one would deprive 40 areas of half their money in order to give something to the other 40. If the Minister had said that the amount of money and the number of areas were to be doubled, it would be logical. I might have been trying to be provocative in certain cases but not to the right hon. Member for Battersea, North, whom I describe as a friend outside the Chamber. But that was what the right hon. Member was saying. He might not have intended to say that. I should not wish to assign any impure or improper motives to him.

Mr. Henley: It is silly to suggest that the amount of money has been determined for all eternity. What is important is that we are establishing a framework for bringing assistance to these areas. At present, £1 million is all that we can afford, but it is within the pro

vince of this Government—I am sure that they will continue for a long time—to increase the amount as new needs and new areas are established. It is absurd to argue that we are cutting up a finite cake which will remain the same for ever.

Mr. Finsberg: That is a fair point. But this is the amount of money that has been allocated. If the Government name more areas, it would be consistent at the same time to produce more resources. Much of this is a transfer of money which has been already allocated. Far more money is being spent in the inner areas of London by the GLC, for example, than all the money that is proposed in the Bill. I am sure that the hon. Member for Heeley accepts that. As my hon. Friend the Member for Liverpool, Wavertree (Mr. Steen) said, there is a smokescreen, but I welcome the provision

Mr. Steen: I should like my hon Friend's view on two issues. First, does he realise that it is not a question of £80 million or £100 million more? Some of that money will come from the outer wards and will be diverted from the domestic rates to pay for the shortfall in the inner rate bill. Secondly, is my hon. Friend aware that in Liverpool the amount of money that has been taken away already through the reduction of improvement grant finance from the Government and local authority mortgage loans is about the same as the money which is now being offered by the Government in the shape of partnership money and that provided under the Bill? There is hardly any new money for Liverpool. It is either diverted money from the outer areas to the inner areas or the replacement of money which the Government have taken away in the last three or four years.

Mr. Finsberg: If what my hon. Friend said in his second question is right—and I take what he says as fact—on 4th May the deprived city will be able to register its view of what is being done to it. The local people can do far more than I can do today and they may take along with them some fellow sinners.
My hon. Friend was correct in his first point. This is reflected in the rate support grant and the elements that make it up. There is an extra disadvantage.
an extra canister of smoke, in that argument.
The hon. Member for Newcastle upon Tyne, East spoke of building a co-operative supermarket to try to create more jobs. I go along with him on that. But I wonder whether building a supermarket, which is capital intensive whoever builds it, will bump up against the limitation about which my hon. Friends have spoken—the £1,000 job related to the overall total cost. I wonder whether that figure might be an inhibiting factor. It might have been wiser to have a larger figure. I appreciate that the power that the Minister is taking will enable him to designate a different figure in certain circumstances. I merely put to the hon. Gentleman that that is a possible danger that he may not have realised.

Mr. Mike Thomas: The hon. Gentleman and I are largely at one on these matters, as he knows. But I did not refer to a supermarket. I talked more about the distributive warehousing facilities, although I agree that shops and supermarkets are also a possibility. I hope that the hon. Gentleman will agree that it is better to have this power available for commercial building than not to have it at all, so I beg him not to be too churlish.

Mr. Finsberg: Certainly. I am glad that the hon. Gentleman is agreeing with me. I do not think that I am agreeing with him necessarily. It is a case of the chicken and the egg. We agree. Let me put it that way.
My hon. Friend the Member for Aylesbury (Mr. Raison) did a helpful analysis of the dangers, which have been expressed on many occasions in the House before, of the creation of "phoney" jobs. As I think he said very fairly, the real danger is the attitude that it may create in the minds of those who have "phoney" jobs. This is the worrying factor that we shall not know about for a long time.
My hon. Friend the Member for Birmingham, Stechford (Mr. MacKay) analysed the problems that existed and gave us the helpful views of a Member from an inner city.
The hon. Member for Heeley reverted to the argument with which he convinced the majority of the Committee, although

he will recall that I was not convinced and I abstained on that issue. There was a certain amount of confusion on this matter in the Minister's mind. He was good enough to send a three-page letter to all members of the Committee because of the problem he caused us by telling us that "or" meant "and" and "and" meant "or". He was trying to be helpful.
Alas, when this happened and I tried to put forward certain other interpretations we were not able to have a debate on a selected amendment. But I am glad to know, and the House should be glad, that "and" is not always identical with "or". If it had been, that would have created a large number of problems for many people. I think that this is one of the reasons why some of my hon. Friends felt that to try to clear the matter up they should support the hon. Gentleman's amendment in Committee. I think that the Minister has now cleared up the discrepancy. Certainly, I believe that what is now proposed is correct, that the powers should be concurrent and both authorities should have the right to designate according to the particular needs of the area.
We have discussed a substantial number of amendments. I think that all, perhaps with one exception, are helpful. I am not certain whether the hon. Member for Aldridge-Brownhills (Mr. Edge) will press the Government on his Amendment No. 36. He certainly received a degree of acceptance and support from my hon. Friend the Member for Wavertree. It struck me as a helpful sort of amendment. It adds to the sort of argument that the hon. Member for Newcastle upon Tyne, East and I put in Committee, together with his hon. Friend the Member for Woolwich, East (Mr. Cartwright), to try to widen the scope of the provisions.
The widening of the scope of this Bill must, as the hon. Member for Newcastle upon Tyne, East said, take it more than a millimetre—indeed, more than a centimetre. It will force the Treasury to think very carefully about a wide variety of matters where so far it has been prejudiced against commerce. This is a very important first step. The amendment would take us one stage further.
The debate has been useful. Many questions require an answer. I hope that the Minister will be able to answer them


and clarify the various issues that have been raised.

6.45 p.m.

Mr. Guy Barnett: Inevitably, with such a wide range of amendments and new clauses grouped together, we have had a diffuse but very interesting debate. A number of very important points have emerged, as they did in Committee.
In a way, I was surprised by the speech of my hon. Friend the Member for Sheffield, Heeley (Mr. Hooley), although I recognise his feelings on the issue of the counties. The hon. Member for Barkston Ash (Mr. Alison) also raised the matter, in view of our amendments to restore the powers of counties under the Bill.
I want to emphasise to the House, and particularly to my hon. Friend, that one of the reasons why we have been insistent on this point is that, for the very reason that the Local Government Act 1972 exists, there is a range of powers and responsibilities in the hands of the counties. There are also resources in the counties' possession which are valuable for the operation of inner city policy. It would be absurd to deny those counties with a contribution to make to inner city policy the ability to make it, and particularly to do so on the grounds that in certain parts of the country there appears to be such hostility, suspicion or whatever between the two levels of local government as to make it impossible for them to co-operate.
The assumption behind some speeches on this topic today was that the only consequence of allowing powers to the counties would be constant confusion and overlapping, and that presumably inner city policy would suffer as a result. I deny that, certainly on the basis of the two partnership committees that I chair. I have seen no evidence of such a thing happening so far. I suppose that it might happen in the future, but everything in the shape of co-operation has taken place. In both committees, because they are London authorities, the Inner London Education Authority has also been involved and has co-operated.
We must accept that if we are to do the sort of job that needs to be done in the inner cities we must have a measure of co-operation, and that must extend

beyond local government. Some hon. Members spoke today as though they did not want Government Departments to be involved, because it would mean that too many people would be sitting around the table at partnership meetings for anything to be done. I have chaired several partnership meetings, and on the basis of my personal experience I can assure hon. Members that this is not so. We need the active participation and involvement of statutory authorities, whether at central or local government level, in order to do the job that needs to be done.
I suppose that the fact that we need all that assistance and co-operation could be a criticism of our present system of government, but that is not what we are here now to change. We must take the system that we have and accept that many powers under the Local Government Act are concurrent in precisely the same way as the powers in the Bill are. For example, the powers in the Local Authorities (Land) Act 1963 are similarly concurrent. Clause 2 is founded on that Act. There is no restriction in the 1963 Act requiring a district council to act in its own area. It can carry out works outside it for the benefit of its district. There is no restriction on counties either, nor any requirement for consultation. But, of course, any works requiring development will require planning permission.
This is not a new idea that we have invented. We must accept that concurrent powers exist as between the two tiers of local authorities. The present partnerships have led the way by showing that co-operation is possible and desirable. I hope that in those other areas where districts are designated there will be co-operation.
There is another point. The assumption has been made by some hon. Members that it is the district that is the relevant authority, yet in terms of industrial development there are parts of the country in which the county has taken the lead. In those areas it clearly would be damaging to leave the county out of the Bill.
The hon. Member for Barkston Ash raised the question of consultations with regard to the powers contained in Clause 2. He may have exaggerated his case, on the ground that Clause 2 concerns the giving of loans at commercial rates. It


would hardly be thought necessary for a bank that wanted to give loans to a particular company to have to consult the local authority, and I do not think that if a local authority is providing loans at commercial rates it should be necessary to write into the Bill the requirement to consult. However, obviously consultation between the two tiers of local government would be highly desirable.
We have had an important and useful debate about the commercial aspect of the new clause. I emphasise one point. The suggestion has been made that somehow the Government are at last changing their policy towards the acceptance of commercial activity as respectable and important in the inner cities. The Under-Secretary of State for Industry has been criticised for his attitude in Committee. I quote him quoting himself, which he did in Committee. He said:
We do not have a lingering prejudice, as the hon. Member suggested, because assistance is available under the service industry scheme to any non-manufacturing activity which has a genuine choice of location and which chooses to move to or expand in the assisted areas."—[Official Report, Standing Committee A, 16th March 1978; c. 401.]
Hon. Members can read the rest of the quotation for themselves. What, in effect my hon. Friend is saying is that there is no prejudice against commercial activity; indeed, there is encouragement of it.

Mr. Geoffrey Finsberg: Does the Minister agree that immediately after that, on the advice of the Under-Secretary, Government Members voted against the commercial amendment before them?

Mr. Barnett: The hon. Member is being a little ungenerous, in view of the amendments that we have moved this afternoon. To expect the Government to respond immediately to powerful arguments advanced in Committee would be quite unreasonable. We have considered the arguments carefully and have come forward with amendments on Report which I know the Opposition are more than anxious to accept.
The suggestion has been made that we should have commercial and industrial improvement areas. It has been said that commercial activity will provide more jobs in inner city areas than will manufacturing industry. Hon. Members have claimed that if we are interested in jobs we should think about this suggestion. We had an

interesting speech from the hon. Member for Aylesbury (Mr. Raison) on the whole question of job creation, but there is no time for me to go into that now. The House should take account of the highly successful series of conferences that have taken place for small business firms in various parts of the country, centred on the inner city areas with which the Bill is concerned.
There has been very active and ready response from small firms, and interest of local authorities and others in the ways in which small firms could be encouraged to operate in inner cities. Some of the lessons that we have learned from the conferences are highly relevant to the ways in which small firms can help to provide jobs in inner city areas.
The reason why we held these conferences was that small firms tend to be labour-intensive. Had Opposition Members spent a morning last week, as I did, going around Hackney, which is part of the partnership area that I chair, they would have seen the number of small manufacturing jobs that are available, and the small operations that take place, sometimes in difficult circumstances. They would then realise that there is potential in manufacturing industry and also commercial industry. But it is in manufacturing industry that one can hope to provide many of the jobs that are needed in inner city areas to lower the level of unemployment.

Mr. Edge: Can my hon. Friend produce one vestige of statistical evidence to support that claim? Can he produce one example of an inner city area where manufacturing employment has increased?

Mr. Barnett: Not without notice. Also, it is not my responsibility to produce that evidence. I simply said that there are many firms operating successfully in the area that I visited recently, in spite of relatively little assistance, and a great many problems created by congestion and other difficulties. Much of the evidence that we have had shows that with a more helpful attitude from central and local government more can be done. I am not in a position to produce the evidence that my hon. Friend requires, and if I were to do so I am not sure that it would either prove or disprove the case that he puts.
Naturally, in a debate of this kind one expects to listen to speeches such as those of my right hon. Friends the Members for Blackburn (Mrs. Castle) and Battersea, North (Mr. Jay), who put the case for their areas. The Secretary of State and I have had many such representations from all over the country from those who wish to use the powers contained in this Bill. The hon. Member for Hampstead (Mr. Finsberg) rather spread himself on the question of how little money would be available. It is the powers that will be of value to the authorities, in enabling them to do the job that needs to be done.

Mr. Steen: When the Minister talks about money, surely he is talking about powers to borrow, because that is what the Bill is about.

Mr. Barnett: No, not necessarily. My two right hon. Friends raised the question of the designation of their own districts. I apologise for the fact that the Secretary of State is not in a position yet to announce the full list of designated districts. We hope to do so as soon as possible. I know that an undertaking was given that this would be done during the passage of the Bill and there was general expectation that it would have been done by today. However, there are inevitable difficulties in making the sort of decisions that need to be made about designations.
One of the difficulties is that, however many lists one publishes of the sort of factors that need to be taken into account—racial tension, unemployment, dereliction, quality of the environment and the degree of industrial decline—there is still a large element of judgment entering into the final decision. However accurate the statistics, judgment is necessary for two reasons.
The first is that if there is racial tension in Blackburn, for example, it may be a factor of great importance. But for quite different reasons Newcastle is a partnership area, and it is an area that has no significant racial minority. Despite this it has been made a partnership area, because other factors have influenced us in making that decision.

7.0 p.m.

Mrs. Castle: First and foremost, as I pointed out in my speech, all the factors operate in the case of Blackburn.

Secondly, if, as my hon. Friend says, it is primarily a matter of giving people powers to do something that they want to do, what is the difficulty? Why withhold powers that can enable people to achieve the ends that the Government want?

Mr. Barnett: The answer to that is that if one gives powers to certain authorities and not to others, one gives a distinct advantage to the authorities that are given those powers in being able to retrain, preserve and attract jobs to their areas on an intra-regional basis. Therefore, the decisions on which particular districts are designated are important, because designation will give them the edge over other districts in the area in their ability to attract more jobs, industry and activity into their own areas. That is the reason for that.
As I have said, it is difficult to cover the whole range of issues that were raised during the debate, but I ought to deal specifically—because it relates to an undertaking that I gave the hon. Member in Committee—with the issue that the hon. Member for Hampstead raised again this afternoon. I refer to the question whether Ministers in person would be involved in the decision about the revocation of an industrial improvement area.
The answer is that I looked at this issue very carefully and decided that, on the whole, it would be wrong for me to give any such undertaking that Ministers would always be personally involved in such a decision. That is not to say, of course, that the Minister, whoever he might be, would not be answerable for whatever decision was made. Indeed, we shall issue clear guidelines to local authorities about the size and type of areas that we would expect to be declared as industrial improvement areas, and each declaration will be looked at to ensure that it conforms to these guidelines. I do not expect that many declarations will have to be cancelled, and, as always, officials will be given a clear indication of what cases will have to be seen by Ministers personally.
However, I think that to give that kind of indication here and now would be quite wrong. Indeed, I think that decisions of that sort are probably invariably taken on the basis of the experience of the working out of a particular piece of legislation. Therefore, I do not think that I can undertake to provide an answer


to that particular question, certainly not in the way that the hon. Member wants.
I do not want to detain the House for longer than I can help. A number of detailed points have been raised in the debate—

Mr. Geoffrey Finsberg: I specifically asked at the beginning whether, by going to the two sets of authorities that designate, one could get two loans, and whether, by the system that is now being proposed, the county, by precepting upon all the districts, would be able to get money from the district which itself had not wished to designate.

Mr. Barnett: Briefly, the answer is that the county precept would, indeed, fall on all the local authorities in the county. The answer to the other question is "Yes", it is indeed possible for an applicant to get loans and grants from both tiers of local government, but we should ensure by directions that the maxima are not exceeded in total. I hope that answers the specific question.
I recognise that other detailed questions were asked, some by the hon. Member for Barkston Ash in an interesting speech. Perhaps I may undertake to write to him dealing with the specific issues raised. I also say to him and other hon. Members that I was very grateful indeed—as will be my right hon. Friend when he reads what was said—for the kind remarks made about the degree to which we have been able to respond to the criticisms and suggestions made in Committee. I genuinely meant what I said about the quality of the debate in Committee, and I think that today's debate has been useful and interesting, as well.
In the light of all that has been said, although inevitably a range of opinion has been expressed, I hope that our amendments and new clauses will be accepted by the House.

Question put and agreed to.

Clause read a Second time.

Mr. Stephen Ross: On a point of information, Mr. Deputy Speaker. May I ask whether it is proposed that I shall be allowed to move my amendment, No. 34? As I see things now, we do not have a definition of "commercial".

Mr. Deputy Speaker (Mr. Bryant Godman Irvine): Order. We go through

the Order Paper in the way in which it is printed, in accordance with the Bill. When we come to Amendment No. 34, the matter will be dealt with.

Clause added to the Bill.

New Clause No. 2

GRANTS FOR CONVERTING OR IMPROVING BUILDINGS

'.—(1) Where a designated district authority are satisfied that the carrying out by any person of any works mentioned in subsection (2) below on land situated within an industrial improvement area would benefit that area, they may make a grant to that person for the purpose of enabling him to carry out those works.
(2) The works referred to in subsection (1) above are as follows—

(a) the conversion, extension, improvement or modification of industrial or commercial buildings; and
(b) the conversion of other buildings into industrial or commercial buildings.

(3) The amount of a grant under this section shall not exceed—

(a) 50 per cent. of the cost of carrying out the works; or
(b) £1,000, or such other amount as may be specified in an order made by the Secretary of State for each job which, in the opinion of the authority, is likely to be created or preserved as a result of the carrying out of the works,

whichever is the less.

An order tinder this subsection may make different provision for different designated districts.

(4) Subsections (6) and (7) of section 3 above shall apply in relation to the making of grants under this section as they apply in relation to the making of grants under that section.

(5) In this section "industrial or commercial building" means a building in use or intended for use for industrial or commercial purposes.'—[Mr. Shore.]

Brought up, read the First and Second time, and added to the Bill.

New Clause No. 3

ORDERS SPECIFYING SPECIAL AREAS

'.'—(1) Where any arrangements have been entered into under section 4(1) above as respects a designated district, the Secretary of State may, subject to subsection (3) below, by order specify the whole or any part of that district as an area as respects which the powers conferred by sections 5, 6 and (Grants towards loan interest) below shall be exercisable by the designated district authority, or, as the case may be, either or both of the designated district authorities with whom he has entered into those arrangements.


(2) In this Act an area so specified in relation to a designated district authority is referred to, in relation to that authority, as a "special area".
(3) The Secretary of State shall not make an order under subsection (1) above enabling a designated district authority to exercise the powers conferred by sections 5, 6 and (Grant towards loan interest) below as respects a special area except with the consent of that authority.'—[Mr. Guy Barnett.]

Brought up, and read the First time.

Mr. Guy Barnett: I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker: With this it will be convenient to take Government Amendments Nos. 19, 21, 23, 24, 25, 33 and 37.

Mr. Hooley: On a point of order, Mr. Deputy Speaker. Are you not putting the Question on Amendment No. 3?

Mr. Deputy Speaker: The answer to the hon. Member is the same as that which I gave to the hon. Member for Isle of Wight (Mr. Ross) a moment ago.

Mr. Barnett: The new clause and the amendments that go with it split the original Clause 4 into two, so that provisions that enable the Secretary of State and Ministers to enter into arrangements are separated from the provisions for specifying special areas. The aim is to clarify the meaning of each part of the Bill. The wording of the new clause follows the Bill as originally published, with a reference to
either or both of the designated district authorities
and thus reinstates two lines that were deleted in Committee, consequential on the removal of counties from Clause 1.
The purpose, as I have said, is to clarify the Bill. We think that it is necessary to separate the provisions that enable the Secretary of State and other Ministers to enter into arrangements with local authorities and other bodies from the provisions that enable the Secretary of State to specify special areas. The new clause also restores some words that were deleted from Clause 4, to which I have just referred.
I come now to Amendments Nos. 19, 21, 23 and 33. In his speech on Second Reading, my right hon. Friend explained that the purpose of Clause 4 was to give statutory recognition to the partnerships and other arrangements that Ministers might have with local authorities in order

to tackle inner city problems. He said then:
Even though there is nothing at present to stop Ministers from entering into such arrangements without statutory authority, we thought it right to give them recognition in view of the possibility that the Minister's participation in the development of a programme or partnership might be said to conflict with his statutory responsibilities, for example, those relating to planning or compulsory purchase."—[Official Report, 9th February 1978; Vol. 943, c. 1695.]
While all the partnerships established so far have involved my right hon. Friend or Ministers acting on his behalf, it is just conceivable that arrangements might be entered into which did not involve any Secretary of State—unlikely, but perhaps it is conceivable.
These amendments give to all Ministers involved in co-ordinating arrangements for the purposes of alleviating special social need in an inner urban area, whether the Secretary of State is involved or not, the same protection as the original wording gave to Ministers involved with the Secretary of State in such arrangements.
I hope that this is sufficient explanation of the new clause and the amendments.

Mr. Alison: I am obliged to the Minister for his explanation of New Clause No. 3, which at first sight appears to be a similar provision to that which already exists. However, it allows me to touch on a point which was of some concern when it was considered in Committee and which has not been fully and satisfactorily explained in the debates that we have had so far. I make the point now as it gives the Minister notice that I shall want to raise the matter when we come to another part of the list of amendments and new clauses.
There is a curious division between the lesser and the greater luminaries in the local authorities, or the "needs world". if I may so put it. I refer to the areas of special social need to which reference is made in the first two lines of Clause 4. Those areas of special social need are then designated. However, we have the curious hybridity in Clause 4 that is reflected in another part of the Bill. In Clause 7(5) that is made clear, where it is stated:
This section shall apply in relation to a district (other than a designated district) … which the Secretary of State has entered into arrangements under Section 4(1).


It seems that that is the dog that does not bark in this plot. It is the Holmesian dog that does not bark. This is the area of special social need that fails to be designated. That is for reasons that are entirely within the gift of the Minister. He has the power of designation under Clause 1 and yet there is held to be—Clause 4 makes this clear—such a thing as an area of special social need that does not get the benefit of designation.
I hope that the Minister will take this opportunity to throw light on the problem. Why is it that we have to have the rather shadowy area of special social need that is contained in the first two lines of Clause 4, an area of special social need existing in any inner urban area, which nevertheless fails to get designated and, therefore, fails to get any of the benefits or provisions for which the whole of the rest of the Bill makes provision? This undesignated area of special social need is a shadowy entity, but there is no doubt that it exists. As I have said, that is made clear in Clause 7(5) where it is stated:
This section shall apply in relation to a district (other than a designated district).
Why is it that we are having to include in Clause 4 some elaborate provisions for a special area—the special area is the subject of the new clause—when we have within the same clause a non-special area that is still held to be one of special social need? Special social need is referred to for both sorts of district, that which is designated and that which is not. However, those areas that succeed in becoming designated become, as it were, special, special areas of social need. I hope that the Minister understands the problem with which we are landed.
There is the paradox that the whole of Clause 4 deals with areas of special social need but we find that within such areas there shall be an area of special social need, which is one that is a designated district. That is what we are designating as an area of special social need by the new clause, but that does not alter the fact that the beginning of the clause refers to two types of area, one designated and one not. Both types of area are referred to in broad terms as areas of special social need.
The position is slightly confusing and muddling and it would be interesting to know why the Minister wants to include in Clause 4 the second-class citizen

of social need, the area of special social need which occurs in Clause 4(1) but which does not go on to be included in the designated group. What is it that the Minister hopes to do in such areas? What special powers will they enjoy? Why is it that we have to have the rather hybrid feature of Clause 4, with the rather muddling designation of speciality applying to both groups? I hope that the Minister has the nature of the problem.

7.15 p.m.

Mr. Guy Barnett: At this stage I shall not attempt to answer all the questions that the hon. Member for Barkston Ash (Mr. Alison) has asked. I shall deal with some of them at a later stage. Part of the answer to the question that he has asked lies in the confusion that has existed in several hon. Members' minds about the meaning of "area" as opposed to "district". He will note that the beginning of the clause reads:
If the Secretary of State is satisfied that special social need exists in any inner urban area … he may … enter into arrangements ".
Later in the proceedings, if I have the opportunity to do so, I shall give the hon. Gentleman the explanation to the problem that he has presented. I shall try to make the position as clear as possible at that stage.

Question put and agreed to.

Clause read a Second time, and added to the Bill.

New Clause No. 4

GRANTS TOWARDS LOAN INTEREST

'(1) Where—

(a) a designated district authority are satisfied that the acquisition by a small firm of land situated within a special area, or the carrying out by such a firm of any works on land so situated, would benefit the special area; and
(b) a loan is made to the firm (whether by the authority or by any other person) for the purpose of enabling it to acquire that land or, as the case may be, carry out those works,

the authorities may, in respect of such period and by such instalments as they may determine, make a grant to the firm towards the interest payable in respect of that loan.

(2) Subsections (6) and (7) of section 3 above shall apply in relation to the making of grants under this section as they apply in relation to the making of grants under that section.

(3) In this section "small firm" means an industrial or commercial undertaking which


has no more than fifty employees.'—[Mr. Guy Barnett.]

Brought up, and read the First time.

Mr. Guy Barnett: I beg to move, That the clause be read a Second time.
The clause gives an additional power in partnership areas. Clause 6 enables partnership authorities to help firms that rent premises in a partnership area, but there was no corresponding assistance for firms that intended to build or buy premises. The new clause will enable local authorities to give some assistance to such firms. It allows the local authority to make interest relief grants, subject to any direction from the Secretary of State, to firms that employ fewer than 50 workers. We felt that such a limitation was appropriate, as we see the Bill primarily as assisting small firms that have local links and are settled in inner city areas. Firms have to be already trading in the partnership area before they can receive grants.
These grants will thus be an incentive to firms to buy the premises that they occupy, to extend them, or purchase other premises in the partnership area. They are not intended, in the first place, as incentives to firms from outside to come to the partnership areas, as there may, in the latter case, be a conflict with regional policy. Accordingly, a firm will have to be established in the partnership area for a minimum of 12 months before it becomes eligible for a grant.

Mr. MacKay: The Minister will be aware that my right hon. and hon. Friends and I are pleased that small businesses are being specially treated. However, I am slightly disturbed that they have to be in the designated area for 12 months. I was also disturbed to hear the lion. Gentleman say that the reasoning behind the decision was not to upset any existing regional policy. Surely it was sufficient that we should designate certain areas of our inner cities as derelict areas in need of attention. That was sufficient reason to encourage firms to go into those areas. Whether such designated areas happen to be within one of the Government's development areas is really irrelevant.
Surely we proved in Committee and on Second Reading that the object of the exercise is to improve the dire situation in certain of our large deprived inner city

areas. Birmingham, for example, is technically in the so-called prosperous West Midlands, or once prosperous West Midlands.
Many parts of Birmingham are in the designated inner urban area, but others are not, as I pointed out earlier today. These are areas where there is considerable dereliction. They are areas where there is great need for Government assistance. They require new industry and jobs, particularly from small firms. It is a pity that in New Clause No. 4, which in other respects is worth while, we cannot encourage new small firms to set up in areas such as the inner areas of Birmingham.
I come back to the general point about small businesses. I hope that the Minister does not think that I am being unduly churlish in saying that this Government are a Johnny-come-lately to small businesses, whereas the Opposition have for many years encouraged the virtues of small businesses.

The Under-Secretary of State for Industry (Mr. Bob Cryer): Could the hon. Gentleman say which Government instituted the Bolton Committee of Inquiry on Small Firms, which made recommendations to the then Government of the day, some of which were implemented? Will he outline which Minister called for the Bolton Report, and the year?

Mr. MacKay: To counter that, I ask the Minister: who brought in capital gains tax? Who brought in many complicated bureaucratic measures which caused small businesses a great deal of difficulty in operating and discouraged them from starting? Without wishing to go too far down that road—it is an interesting argument, but I suspect that it is not relevant to the new clause—I ask the Minister: which Government failed to raise the level of VAT exemptions? We refer back to the Labour Government.

Mr. Cryer: Will the hon. Gentleman say which Government brought in value added tax? Will he state the limit for the exemption from VAT? Does he accept that there is an EEC limit, which is fixed at about £10,000 for exemption purposes? I am sure that he would not like to go outside the general directions laid down by our EEC partners.

Mr. MacKay: It surprises me that the Minister, of all Ministers, is loth to go outside the EEC guidelines. I recall many examples when this Government have gone outside such guidelines.
Referring to the more general topic of VAT, of course the Conservative Government brought in that tax. VAT, as such, is not a tax that will adversely affect small businesses. It will affect them only if the exemption level is too low and brings in firms that are unable to afford the clerical staff to cope with it. I think that the Minister is fully aware of that fact.
Returning to my theme about small businesses and the Government being a Johnny-come-lately to seeing the benefits of the small business community, nevertheless the Opposition are delighted that at long last the merits of small businesses have been seen.
I believe that small businesses are the best potential employers of the future. They are most likely to take on fresh workers, to move into inner city areas and to assist in livening up and rejigging such areas. I believe that they should be encouraged. To this extent, I am naturally grateful to the Minister for moving the new clause after the representations that we made in Committee.
When the Minister winds up the debate on the new clause, will he tell us why we cannot give encouragement to small businesses to move into designated areas in our inner city areas, particularly areas which are not already associated with the Government's regional development programme?

Mr. Alison: We are delighted that the Under-Secretary of State for Industry—the hon. Member for Keighley (Mr. Cryer)—should have become such a passionate partisan of the small business enterprise that he leaps to the defence of the Government's record. This is an excellent conversion. We are delighted that he has taken that attitude. But he and the Government remind me of a gang of ruffians who come upon an unfortunate member of the public, throw dirt all over him, and then come forward with a patent cleansing fluid to get rid of it. I suggest that it would have been better not to have upset small businesses at the beginning in the way that they have been upset. We should not then need all these

special provisions which are now being brought forward.
I want to concentrate on the new clause moved by the Under-Secretary of State for the Environment. We are pleased with it and congratulate the Government on the step that they have taken in this direction.
I should like to ask the Minister some questions. It may be that he cannot answer them on the spot, but perhaps he will take advice and let me know the answers in due course.
First, what is the meaning of the term of art in the new clause—
a grant to the firm towards the interest payable"?
Does that give us any idea of the extent to which the grant covers the total interest? Is it meant to be a small proportion, or the totality? It is a term of art.
It is relevant to ask this question because, unless we know the extent of the words "towards the interest payable", it is difficult to work out whether the Government are giving something which, from the point of view of the small business, is preferable to the powers already available in Clause 5 where provision is made for a total holiday in respect of interest and principal for two years. It is not possible to know whether it is better for the small business to go for the interest and principal-free loan for two years, which is clearly the full extent of the loan or interest payable for that period, or to go for the provisions of New Clause No. 4. It would be interesting to have some clarification on this matter.
I should be glad of the Minister's illumination on the question whether the small business is likely to be better off with this contribution towards the interest payable not only in respect of the alternative that seems to be provided in Clause 5 but the alternative provided in Clause 6, where grant is payable towards rent under a lease. Again, it is a term of art. We do not know how far the grant goes. There is some overlap in the provision made here between the new clause provisions and those in Clauses 5 and 6. That is the first little group of questions, that I ask the Minister about the new clause.
The second part of the new clause refers to enabling a small firm to carry out


works on land. Given that, under the new clause, acquisition is a clear-cut opportunity for a small business, it is also able to get relief on loan interest in respect of works carried out.
We tabled an amendment to a later part of the Bill—unfortunately, it has not been selected—in which we attempted to explore the question whether there were any means by which what can broadly be called working capital might be the subject of some assistance. Perhaps the Under-Secretary—the hon. Member for Keighley—could throw some light on this matter, either by an intervention or indirectly in some other way. He will know that for any firm the installation of plant, machinery and equipment in buildings is an important part of the cost element in setting up business in any part of the country. It is landed not only with the acquisition cost of acquiring a new building or site or of conversion or adaptation costs of a kind for which the new clause makes provision, but, if starting de novo, with the problem of working capital provision and, in particular, the installation of plant, machinery, equipment, and so on.
7.30 p.m.
It will be interesting to know whether the "works" referred to in line 7 can be stretched to include the installation of plant, equipment and machinery and whether the loan funds available to the small business to make those installations will be subject to interest payable under the terms of the clause. It would be of great advantage to a small firm if such working capital could be provided for.
I wish to refer to the use of relief for small businesses in the acquisition of land. This is one of the special features of the new clause, namely, that loans made to enable small businesses to acquire land are to be subject to the relief given by the clause. The interesting fact is that although many parts of the Bill make provision for loans or grants in respect of various operations carried out on land, this is the only example in the Bill of special help given towards the acquisition of land.
The only acquisition provision in the whole of the Bill, so far as I can see, is contained in Clause 2. Land acquisition under that clause relates to loan finance which is at a level of 90 per cent. but

which must be carried out at full commercial rates, with no special subsidy. All the other grants and loans available in the Bill relate to things done on land, acquisition having been completed in some shape or form. This is a unique case in respect of the small business in a special area under New Clause No. 4, in which special help is given towards the loan charges involved in land acquisition.
Have the Government thought through this matter? Do they believe that it is only the small business that is in need of special help in land acquisition? I suspect that the cost of land acquisition in inner urban areas is one of the greatest disincentives to firms of any size set up in those areas. The problem in inner city areas is that often the local authorities own much of the land and may be prevented by statute from disposing of that land at a rate which reflects its real value because of the level of the cost of acquiring that land. Therefore, for businesses of any size—large, medium or small—the problem of the high cost of borrowing for land acquisition bears on them all.
Uniquely, the Minister intends to give relief to the small business for land acquisition. Has he deliberately decided that all other scales of land acquisition by medium-sized businesses or anything larger than a business employing 50 employees will not be available for relief, and has he ruled out the possibility of any special relief to businesses of any size who wish to have help when seeking to buy high-cost local authority land in inner city areas? These costs, for historical reasons, can be very high.
Small business will now obtain relief under the new clause. This will be of great help, but why is the Minister limiting the help to small businesses? Will consideration be given—if not here, in another place—to the extension of help towards land acquisition in special areas for businesses with over 50 employees?

Mr. Guy Barnett: I shall do my best to answer the detailed questions put to me by the hon. Member for Barkston Ash (Mr. Alison). I am not sure that this is the best way of dealing with some of those detailed matters.
The hon. Gentleman asked an earlier series of questions about New Clause No. 4. Designated districts are those with special social need which will benefit


from the powers in Clauses 2 and 3. Secondly, arrangements can be made under New Clause No. 4 as regards districts with special social needs—districts which need a concerted effort but which may not need the powers in Clauses 2 and 3 so much, if at all.
Clause 7 can apply to both designated districts and districts with arrangements. The powers in Clauses 5 and 6 can he exercised only by designated district authorities. They are unlikely to need the powers in Clauses 5 and 6 if they do not also need the powers in Clauses 2 and 3, and this applies to those which have arrangements. Clauses 5 and 6 are exercisable within a special area decided by the partnership and geographically defined by the Secretary of State by order.

Mr. Alison: The Minister pinpoints the rather nebulous entity called "the arrangements". Has he any idea what sort of area an "arrangements area" would be? Is it bound to be inner urban? Is it bound to be an industrial area? Will he give an example of what the Government have in mind?

Mr. Barnett: Presumably, it is an area with arrangements that is not designated. I cannot give the hon. Gentleman an answer since no such area now exists. Therefore, I do not think the question arises. It has been included on the assumption that at some time in future such a situation might exist.
Let me now deal with the other issues that were raised. The grants in the new clause are grants towards interest payable. The Government intend to prepare detailed proposals which will be included in directions under the Bill. The Government do not intend to give powers to local authorities to grant-aid the installation or purchase of plant and machinery. That is definitely excluded from the Bill.
I cannot at the moment deal with the other detailed issues raised by the hon. Gentleman, but by way of explanation on the points he made about plant and machinery, and also in answer to the speech made by the hon. Member for Birmingham, Stechford (Mr. MacKay), I wish to make it clear, as did the White Paper, that inner city policy is added as an intra-regional dimension to existing regional policy. It is not a denial of regional policy and therefore has to be seen in that context.
The powers in the Bill—and this applies particularly to the point about plant and machinery—have to be conditioned by the need to maintain present regional incentives but also the offer of assistance to firms which are already in the inner city areas and which by the nature of their business need to remain in them. In general, small firms are less mobile than large ones and more suited to inner city areas. That is the reason why in the new clause we have made this special provision for the small firms.

Mr. Tony Durant: I apologise to the Minister for not being here at the beginning of his remarks. The Bill was progressing rather slowly, but suddenly took a leap forward and caught me unawares. I wish to make only one or two points, some of which have been touched on already.
A large part of the inner city land that we are now discussing is owned by local authorities, as has been pointed out. I believe that this is a major problem, because they are unable to sell always at complete market cost. This is often set by district valuers and may not be of use from the point of view of small businesses. A large amount of the land is also owned by nationalised industries, and there are problems which arise in divesting them of the land.
I particularly wanted to comment on the reason that the Government have suddenly arrived at the figure of 50 people for a small business. Perhaps the Under-Secretary of State, who deals with small businesses, can tell us. Is this his optimum number which he has now decided represents a small business? What will happen if the firm expands, as is obviously the intention, and the number increases to 60? Does the position remain the same concerning the loan? If, after six months of successful business, the firm takes on 10 more people, does that make a difference to the loan position? It is not entirely clear in the clause as it stands. I believe that this is an important point if the measure is to be introduced.
This is a timid approach to the problem. It is as though the Government, with a sudden blinding vision, realised that something had to be done in the inner city areas about small businesses, which are the key to the problem, and decided to settle on 50. What will happen if a


firm develops quickly, going from 50 to 60, and then to 70 or even 80 people?
This is, of course, only a very small beginning and it will not make a lot of difference to the present position, especially bearing in mind the price of land within inner city areas, which is a matter that planners ought to look at. Indeed, they are partly responsible for the situation in the inner city areas from the point of view of land development.
I particularly ask the Minister to comment on the figure of 50, because this is a key point, I believe, in the whole of the development.

Mr. Peter Morrison: I had been waiting for the Under-Secretary to rise from his place. As the Minister in charge of small businesses, I had hoped that he would answer the question put by my hon. Friend the Member for Reading, North (Mr. Durant) as to exactly what is the Government's policy towards small businesses, and how small businesses are defined.
As my hon. Friend the Member for Barkston Ash (Mr. Alison) said, the clause is very welcome, but the fact is that the definition of a small business as comprising 50 people goes far wider than the clause itself. It would be very interesting to know whether this is the Government's definitive way of describing a small business. I am sure that many people listening to the debate would like to know the answer.

7.45 p.m.

Mr. Cryer: We seem to have a plethora of Ministers answering points on this fairly narrow clause. The figure of 50 is a definition for the purposes of the Bill. We have made a judgment that this is the sort of size of firm—the smaller small firm—which is most likely to benefit from the provisions under the Bill.
The definition of 50 has been used previously. The Department of Employment used it when it introduced the small firms employment subsidy as a pilot scheme in the special development areas only. Subsequently it was extended. It is hoped that the scheme will be starting in July this year and it will extend to the more generally accepted definition of 200.
It is generally wise to try to avoid narrow definitions. As has been pointed

out, once we start on definitions, we tend to create anomalies in all sorts of ways. But we hope that this definition will prove satisfactory.
If a small firm of fewer than 50 people applies for a loan and is granted the facility, and then expands, the facility will still be retained, but a firm with a larger number than 50 will be excluded from applying. I think that should clarify the position.
It is a fairly narrow Bill for a fairly narrow range of purposes. It has been tailored for that specific sort of purpose. We think that in this context it is relevant and right at that sort of figure.
It does not bind the Government in any way to a definition—as the hon. Member for City of Chester (Mr. Morrison) suggested—over a wider range of legislation. In general, as I have indicated, it is probably better to avoid definitions if at all possible. As the hon. Gentleman will know, where we have a preferential rate of corporation tax, and a lower rate, it is applied right across the board. If, for example, Imperial Chemical Industries were to make a profit of £50,000 or less, it would qualify for the lower rate of tax. But, of course, it is very unlikely that that would be the case, and it would be the small firms which would benefit. In that situation the legislation is general and avoids the difficulty of definition. But in the circumstances of the Bill it seems to me that a definition is useful, important and necessary.

Mr. Durant: Am I correct in understanding that if a firm, having benefited under the loan arrangement, expands beyond 50, it will retain the loan? I should like that to be absolutely clear from the Minister.

Mr. Cryer: My understanding is that the firm will retain the loan if it completes the formalities and obtains the loan before it numbers 50. I emphasise that the formalities must be completed within the definition of the legislation. If it is outside the definition, quite clearly it will fail.

Question put and agreed to.

Clause read a Second time, and added to the Bill.

New Clause No. 6

ASSISTANCE IN ESTABLISHMENT OF CO-OPERATIVE AND COMMON ENTERPRISES

'Where a designated district authority are satisfied that it would be to the benefit of the designated district to assist persons wishing to establish a co-operative or common ownership enterprise, as defined in the Industrial Common Ownership Act 1976, they may make a grant or loan or both to such persons to facilitate the establishment of such an enterprise.'.—[Mr. Clemitson.]

Brought up, and read the First time.

Mr. Ivor Clemitson: I beg to move, That the clause be read a Second time.
I want to argue very briefly that co-operative enterprises—I use that term in a broad sense to include co-operative and common ownership enterprises, as defined in the Industrial Common Ownership Act 1976—have a peculiarly important part to play in any renaissance of inner urban and inner city areas.
We have heard a great deal in the last few mintues about small firms and the relevance of small firms to the inner urban areas. We may not all be Socialists yet, but apparently we are all followers of Schumacher.
Co-operatives are not, of course, necessarily small, but it is obviously in the small enterprise sector that they have a peculiar relevance. The enemy of small firms is not, I believe, the Government, as a number of Conservative Members keep trying to tell us. Incidentally, in propagating this kind of mythology they do a great deal of harm to small businesses. I do not believe that the Government are the enemy. What causes the end of small businesses in many cases is the big firm taking over. That means often either the complete demise of the small firm or the physical removal of the small firm, or parts of it, through a process of rationalisation. This can have shattering consequences for inner urban areas.
The co-operative type of enterprise has a great inbuilt advantage in this respect, for it is far less likely to be taken over. Again, co-operatives retain their profits within the local community. They do this in two senses. First, co-operatives re-invest a high proportion of their profits. Indeed, the experience is that where co-operative enterprises have a certain per

centage of re-investment written into their rules, the members of the co-operative or the common ownership enterprise regularly determine to re-invest a higher proportion than is required by their rules. In so far as profits are distributed, they are distributed within the local community and not to some distant sort of rentier shareholders.
Another important point is that co-operative enterprises involve local people in the management and running of a major and significant part of their lives. It seems to me that the run-down of inner urban areas has as much to do with attitudes and morale as it has to do with the actual physical run-down of those areas. Giving people the opportunity and the confidence to participate, manage their own lives, take decisions and exercise control is a very important element in building up the confidence of people in inner urban areas.
Co-operative enterprises give a great opportunity for the tapping of energies, enterprise and ideas. One of the tragedies of our society is that so much talent goes untapped and undeveloped. One of our great challenges is to devise ways in which that talent is enabled to develop.
Co-operatives, therefore, provide a very good way of developing new enterprises. Surely we all are agreed that what we want is new enterprise in inner urban areas. Co-operatives have so often been associated with the attempt to rescue failed companies. Here is a great chance for the development of entirely new enterprises.
But co-operative enterprises cannot develop unless they have resources available to them—resources of money, expertise and skilled advice. It is in this particular area that the new clause seeks to provide some help. Co-operative enterprises have not only an important but also a vital role to play in the rejuvenation of inner urban areas. I therefore hope that the Government will see their way clear to accepting the new clause.

Mr. Stanley Newens: I support the arguments advanced by my hon. Friend the Member for Luton, East (Mr. Clemitson) in favour of the new clause. Although I represent a new town, like my parents and grandparents before me I was born in the East End of London. Having spent a significant part of my life


living and working there, I am deeply concerned about the decline of that area, as I am about the decline of all inner city areas.
During recent months—and in connection with this Bill—a considerable amount of discussion has rightly taken place about the part that can be played by small enterprises in regenerating inner city areas. Like my hon. Friend, I believe that this Government have done more to assist small businesses than have the Conservative Opposition, despite the fact that they have consistently made a noise about it.
As a result of my social background, I probably have a much greater contact with small businesses than do many Conservative Members. I assure them of that before they start challenging me on the point. I am quite prepared to discuss the matter with them. I suggest that far more damage has been done in the past by the Conservatives' lack of concern about small business men. The Conservative Party is really concerned with the interests of big business.
In these circumstances we would do well to nay tribute to what this Government have done and, in particular, to what my hon. Friend the Under-Secretary of State for Industry has done in his capacity.

Mr. Durant: Will the hon. Gentleman take it from me that some of us resent his remarks, because we are in small businesses ourselves? We resent his implication that every Conservative Member comes from big business and is not interested in small businesses. I happen to be in a small business. I have 20 employees, which I think is about right under the definition. I can tell the hon. Gentleman that there is widespread resentment at the way in which this Government have behaved towards small businesses. I should like him to give tangible evidence of what this Government have done to help them.

Mr. Newens: If I took it upon myself to endeavour to give a long catalogue of all the things that this Government have done, I am sure that Mr. Deputy Speaker would rule me out of order. There is no need for me to do so, since I am sure that my hon. Friend the Minister will take up that point.
I should like to make it clear to the hon. Gentleman that I am by no means suggesting that there are not Conservative Members, like himself, who are deeply concerned with small businesses. I wish to make it clear that I have no desire to criticise him. What I did say is that this Government have done more for small businesses than have the Conservative Opposition.

Mr. Deputy Speaker: Order. That does not appear to me to be directly related to the new clause. Perhaps the hon. Gentleman will direct his mind along those lines.

Mr. Newens: I shall certainly return to the subject, as I am anxious to do, but as I had been challenged I felt it necessary to make it clear that the Conservative Opposition have done very much less than have the Government for the category of people whom we are discussing.
A great deal of attention has been focused on private enterprise. In many respects that is absolutely right, but we should not overlook the possibility of creating other forms of enterprise where that opportunity exists. The new clause raises the issue of assisting co-operative or common ownership enterprises. In the past, many successful co-operatives were created throughout the country. However, like all small businesses, many of them in the manufacturing sphere suffered a high rate of mortality over the years. Today it is very much more difficult to establish any small business, whether it happens to be a private or a co-operative enterprise.
It is, therefore, important that co-operatives, just as much as private enterprises, should be eligible for the support that the Bill provides. Many of the arguments in favour of co-operative and common ownership enterprises were recently advanced during the Second Reading of the Bill to set up a Co-operative Development Agency. I do not intend to take up the time of the House by repeating them tonight. Like my hon. Friend the Member for Luton, East, I believe that they have a particular relevance to the situation that exists in inner urban areas.
Not only would the new clause provide designated district councils with the power to establish co-operatives; it would, by its very existence, draw attention to an alternative form of enterprise.
Co-operatives and common ownership enterprises can be formed by those seeking employment without waiting for an entrepeneur to come in and without taking the responsibility entirely upon oneself as an individual. Local authorities, therefore, ought to encourage and nurture co-operatives just as much as small private enterprises. I believe that in no way should we prefer one to the other. We should support them all equally. I hope very much, therefore, that the Minister will accept the new clause. I believe that it will in no way detract from the important purposes of the Bill. Indeed, in my view it will strengthen them.

8.0 p.m.

Mr. Peter Morrison: I was interested to hear what the hon. Gentleman said, and I agree with a great deal of it, but what, in his view, is the difference between a co-operative, as he describes it, and a partnership, such as a group of lawyers or accountants?

Mr. Newens: I do not wish to enter into a legal discussion, but in my view all those forms of enterprise, including partnerships, should be encouraged if they are likely to provide, in any locality, the possibility of developing a useful manufacture or service to the community and providing employment. Obviously there are differences between different forms of enterprise. However, I do not wish to differentiate between them in this debate. I am concerned only with the necessity of supporting them all where they have a useful social purpose to fulfil.

Mr. George Rodgers: In recent months, there has been a surge of interest in small firms and their capacity to provide employment, and certainly co-operatives and common ownership enterprises are usually small and labour intensive. It would therefore be unfortunate if provision were not made in this Bill for the encouragement of such ventures.
Co-operatives and common ownership enterprises, by their very nature, are community based and unlikely to uproot themselves, as has too frequently been the case with subsidiaries of major companies which have moved out from city centres to the outer areas and decided when times were hard to abandon and

close down their periphery enterprises in favour of the central ones.
Profits which are generated by co-operatives will circulate locally, as my hon. Friend the Member for Luton, East (Mr. Clemitson) pointed out, and they will have a real impact on revitalising their local communities—the run-down urban areas—because they are rooted in their own localities and utilise and develop local talents and abilities. These abilities might well have lain dormant and neglected or even withered away for lack of encouragement and opportunity without the existence of the co-operatives.
It is sometimes claimed that the record of common ownership enterprises or co-operative industry has not been entirely successful. But the record is remarkably good, bearing in mind that a great number of such enterprises were created from the wreckage of collapsed private companies. This is hardly the ideal lannching ground for new endeavours. Despite that, a high proportion have flourished and many more will do so, given opportunity and sufficient support. If the terms described in New Clause No. 6 are incorporated into the Bill, I am sure that they will prove a very worthwhile investment.
The real hazard to the growth of a small firm is the ability of a large firm to gobble it up. On occasions, of course, it can be to the mutual advantage of both firms to become one. The expertise of the big company with its marketing knowhow and its many outlets can serve the interests of the pushing and enterprising small manufacturer. But sometimes Big Brother in the shape of a large company can effectively destroy the potential challenge of the newcomer.
Common ownership enterprises and co-operatives have an inbuilt protection against the asset stripper because the enterprise cannot be sold and cannot be sold out by a handful of individuals. The whole work force is the controlling ownership. Instead of labour saving capital, capital saves labour, and in fact labour saves labour. This is surely a very healthy arrangement and one which will appeal to workers throughout the country.
The proposed clause should be accepted with enthusiasm. Its implementation will give a thrust to community


involvement and community enterprise. I believe that the support that should become available to co-operatives and common ownership enterprises as a result of the acceptance of the clause will prove a first-class investment to British industry and to the British people.

Mr. Nigel Spearing: Clause 2(1)(a) and (b) as the Bill is drafted at present refer to
the acquisition by any person of land
and
the carrying out by any person of any works on land so situated".
Those of us who put our names to this new clause, while not thinking that the Bill excluded co-operatives, wished specifically to include them in the Bill's provisions.
My hon. Friends have made out an admirable and complete case for doing so, and all that I can do is add a few remarks from personal experience in the East End of London about the position in which we find ourselves today.
My constituency covers exactly half the designated dockland area of London, which I hope will be an entirely designated area. One of the problems which arise with the increasing pace of industrial change is the frequency of redundancy. It is fair to say that throughout London we can see the beginning of a new phenomenon. It is that a few people who have been made redundant and who have known each other in their place of employment get together in a partnership or in a co-operative. The area here is perhaps not one that we can define exactly in terms of practical operation, although I have no doubt that the lawyers will be able to tell us which is which. But these people get together and create a new enterprise very often based upon genuine partnership, working together, and usually on a combination of skills which otherwise would not come together and which, if apart, might not exist on their own. This is not infrequently done by people who have part professional skill and part manual skill.
I am thinking specifically at the moment of a small firm in my constituency. If those involved in such an enterprise manage to patent some device or if the combination of skills which they possess has great promise or great poten

tial, it is not infrequently the case that they are offered capital. But they are offered it on terms which they are unwilling or relucant to accept. It may be that the people who are offering the capital want the patented device. It may be that they want the combination of skills and experience which the partners or the putative co-operative possess. They do not very often want to set them up in business as it stands. That is the experience which is not infrequent, not only in London but in other parts of the country. It is the problem of the takeover or of the people with the capital saying "Very well. We will set you up, but not in the East End of London." A small firm in my constituency has been offered money to set up in Egypt because of the skills that the principal operators possess. I am afraid that the flight from this country of manufacturing talent is frequently caused by an approach of that kind because the ways in which profit can best be made are very much along those lines.
It may be that this is a danger to manufacturing of all types, whether they be co-operatives, small businesses based on private enterprise or even the larger firms. But in the inner areas we must make it at easy as we can for these enterprises to remain, and I believe that this clause will provide one more possibility whereby they can remain.
Unfortunately, in East London and, I suspect, in most other nineteenth century areas of industry, people with skills are made redundant. Therefore, there is at least a potential in terms of skill. There is also a potential in terms of space. One has only to visit some of these areas to see factory after factory—some of them quite modern—for sale or for lease. There is no doubt that the space is there.
As we were reminded earlier in a reference to the late Professor Schumacher, the optimum size of unit for certain products can be small. There is also the possibility of using people for part-time employment, especially the assembly skills of ladies who have domestic responsibilities. That might also fit into a possible co-operative structure.
I am not saying that the new clause will suddenly create a new type of enterprise, but I hope it will. Ten years ago, few people thought that the housing associations had much to contribute. I


am not saying that they are uncontroversial today, and many of us were sceptical of a new form of ownership being brought in at great speed. They have developed, however—although there are still arguments about the way in which some of them have done so.
I hope that the new clause will at least provide a potential. If those responsible for operating the Bill use it wisely, the human potential in the older areas will be made productive. I do not say that that will happen, but it could happen and it sometimes has. The new clause will provide the specific facility and to that extent, one hopes, will encourage universally desired developments.
If the Minister feels that the wording is not all that it might be, no doubt he will say whether he accepts the principle. The draftsmen may say that this provision exists in Clause 2(1), but that is implicit and it should be in the Bill explicity.

Mr. Reginald Eyre: We on this side recognise the serious situation, described by a number of Labour Members, in so many older areas in London, the Midlands and the North. To set up new enterprises which will create wealth and new jobs, individuals must show initiative and enterprise. We welcome those qualities. The forms of organisation referred to in the new clause, particularly common ownership, are acceptable variations on the forms of private enterprise which are essential.
My hon. Friend the Member for the City of Chester (Mr. Morrison) made a valid point when he said that he saw these organisations as the equivalent of small partnership firms. We are interested in these proposals and I hope that the Minister will consider them positively.
Of course, we would not accept any discrimination in favour of these organisations which led to unfair competition. I see that some Labour Members agree with that. Therefore, I hope that the Minister can explain the reference to the Industrial Common Ownership Act 1976. Will that affect the position that I have just described?
Subject to that assurance, and to the acceptance of the principle that there should be no unfair competition, we welcome any organisation which will encourage initiative and responsibility and the

creation of new products and jobs in these urban areas.

8.15 p.m.

Mr. Cryer: I am grateful to my hon. Friends who have supported the new clause, but I do not want to bolster their hopes that such a clause might be widely used for converting existing small firms into co-operatives. The reason is the Government's excellent record in assisting smaller firms. Perhaps fewer such firms can now convert to co-operatives.
The Government's recent record in relation to small firms includes the preferential rate of corporation tax at 42 per cent.; the 100 per cent. relief for small firms—and for medium and large ones—for investment in plant and machinery; the 50 per cent. special valuation for capital transfer tax; the relief for losses in the first three years for unincorporated associations against losses in the previous three years, so that they can be carried back—this is particularly useful when firms are starting up; the extension of the small firms information centres and counselling service; the extension to £10,000 for exemption from VAT; and the simplified scheme to be introduced over the coming months.
All these things are extremely valuable, together with such additional services as the Department of Industry provides, such as special nursery units in the assisted areas, of which we are building a larger programme than this country has ever seen before.
Even with their own Industry Act, the last Conservative Government failed to follow their fine words about small firms by building suitable advance factories. There is a credibility gap between what they say now and what they did then.
I share the concern which has been expressed that adequate assistance should be available to encourage co-operatives and common ownership enterprises. The Government are actively encouraging the setting up of such bodies. We supported the Industrial Common Ownership Act brought in by my hon. Friend the Member for Consett (Mr. Watkins), who is of course here tonight since he takes a deep interest in co-operative endeavour. We have just introduced the Co-operative Development Agency Bill, which has gone through Committee and will shortly be back on the Floor of the House. Both those Bills were widely welcomed.
In addition, such enterprises benefit from the various general powers for assistance to industry, including the Industry Act 1972 and this Bill itself.
The Government have no doubt that co-operatives and common ownership enterprises can be assisted under the Bill on the same basis as any other organisation. Assistance is available to "any person" and under the Interpretation Act, "person" embraces any corporate or unincorporated body. Consequently, I am happy to accept the principle of the new clause.
Some local authorities are assisting co-operatives under Section 137 of the Local Government Act 1972, but a provision in this Bill along the lines of the new clause would give a clear and specific power to designated district authorities for this purpose. No doubt the Co-operative Development Agency would consider, in the light of the experience of the use of such a power, whether similar specific powers should be available to local authorities generally. Hon. Members no doubt remember that the CDA will have a requirement to review all legislation applying to co-operative organisations.
However, the Government need to consider the drafting of the clause. We also want to insert provisions into the Bill such as those in other clauses to enable the local authority to impose conditions, for example to ensure that the money was used for the purpose applied for and to enable the Secretary of State to make directions on the exercise of this power. I think that that ought to answer the point made by the Opposition spokesman. We want to make sure that the Bill falls into line with other legislation and has the same qualifying amendments to the principle of the clause. In addition, the powers of assistance in the Bill were notified to the EEC Commission to comply with all our obligations under the Treaty of Rome. Any substantial addition such as a clause along the lines of the new clause would also require to be notified to the EEC.
I note my hon. Friend the Member for Newham, South (Mr. Spearing) moaning and groaning in the background. His constant critique of the EEC does not go unnoticed. However, we are a member now. It was said earlier that I had

raised one or two points in Committee about the EEC. All I do is draw hon. Members' attention to the facts of life that we have to notify the EEC about certain matters that we operate in the United Kingdom. These include such items as regional assistance and assistance to industry. If there are any alterations, we shall have to notify the EEC of them. This is something that we must face now that we are members.
If my hon. Friends withdraw the new clause, I shall undertake that the Government will introduce their own clause embodying the principle of my hon. Friend's clause when the Bill reaches the House of Lords. I am grateful to my hon. Friends for moving their clause and I hope that they will accept my assurance on that basis.

Mr. Clemitson: May I say how grateful I am—and I am sure that I speak on behalf of my hon. Friends—for what the Under-Secretary has said, for his undertaking and for the assistance that he has given and continues to give to the principle and practice of co-operation? I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.

New Clause No. 9

VOLUNTARY ORGANISATIONS, COMMUNITY GROUPS AND NEIGHBOURHOOD BODIES

"(1) In designated districts and in districts as respects which arrangements have been entered into under section 4 of this Act, the district council shall involve voluntary organisation community groups, and neighbourhood bodies actively involved in the designated areas.
(2) Notwithstanding subsection (1) above the district council shall co-opt representatives of non-statutory organisations to any committee or working party concerned with the implementation of the Act."—[Mr. Steen.]

Brought up, and read the First time.

Mr. Steen: I beg to move, That the clause be read a Second time.
This Bill is marked by the fact that it tends to concentrate on the mechanics of government and local authorities—administration and bureaucracy—and not to concern itself with the needs of people. The Bill is about improving the quality of life of people living in the inner parts of our great towns and cities.
The subject of people has hardly been mentioned by the Government. It is as if people were unimportant, and did not exist. The importance of the thrust in the Bill is that it should involve itself with the plight of the disadvantaged in our principal cities.
We have heard about plans, districts, buildings and grants—everything but the human being. If the Minister is intent on defeating the new clause it may illustrate to the country and thousands of voluntary organisations and community groups the sincerity of the Government about the rights of the individual and those living in inner cities and the many neighbourhood community organisations and groups that have grown up to represent interests, feelings and aspirations in our major towns and cities.
I hope that the Minister will reflect on the impact that this may have on the thousands of people engaged in voluntary work and community activities who have a lurking suspicion that the Government, although they talk about their concern for the individual, have, by their performance, particularly in the Bill, demonstrated that they have no regard for the problems of people and are more concerned with macro-economics. That process is less important to the Government than these grandiose schemes and plans.
I remind the Minister of the importance in this country—in this respect it is different from many of its European neighbours—of the voluntary spirit and voluntary work which is the touchstone of our way of life. Yet, even though there have been many attempts by my hon. Friends to improve it, the Bill still makes no mention of the part that voluntary work will play in the rejuvenation of our inner cities. It is as though the Minister feels that it is not necessary to mention it because he regards it as insignificant and unimportant.
The Government have talked about partnership, and it is important to ask them to realise that to many people this may be no more than another weasel word. The Government have been particularly good at putting forward weasel-worded projects that imply that they are doing something but which, at the grass roots, show them to be doing nothing. There are grandiose words, such as "partnership"

—a word that immediately conjures up the idea of sharing and a feeling of togetherness.
However, when we look at the partnership, we see that it is a cruel joke, an empty and hollow laugh. The Government pretend that they care about the community and are sharing and going into the problems of the inner cities with the whole community, but in reality it is clear that they have no such intention.
It is particularly curious, because the Government's White Paper, which had so much meat and sense in it, has been translated into hard legislation that misses all the finer nuances and profundities of the White Paper. We are presented with a shallow and empty Bill.
The White Paper said:
The regeneration of the inner areas is not, however, a job for central or local government alone. A new and closer form of collaboration is required between government and the private sector, between government and the community including the various representative organisations in the cities and bigger towns, with the voluntary bodies, and above all with the people living in the inner areas. It is their welfare, immediate and longer term, which must be the ultimate touchstone for success.
That was put most movingly and profoundly, and it is a cruel joke that the Bill has not one touch of humility. It will not involve the people living in the inner cities, let alone the voluntary bodies, community groups, residents' and ratepayers' associations. It gives them no part in the taking of policy decisions. At the crunch point, they are nowhere to be seen.
Not surprisingly, Liverpool, which is one of the partnership cities, has tried, without much success, to rectify the situation. Hon. Members should realise that when we talk about the partnership cities we are considering only seven cities—and not the whole of those cities but small areas and pockets in those cities. In some places we are concerned with perhaps only one-eighth of the total land area.
The word "partnership" is a misconception and a contradiction in terms. These are not partnerships, but small pockets in the major conurbations which the Government have singled out for what they call special treatment. It is worth mentioning the sick joke about special treatment, because without the involvement of the private sector and voluntary organisations the Bill is unlikely to bite.
8.30 p.m.
I return to the question of the small areas. In Committee the Minister was unconvincing about the way in which the partnership areas were chosen. He has been equally unconvincing today. In Liverpool it appears that the "inner city" includes an area five miles from the inner city. The outer city is included in the term "inner city". In Liverpool it seems that the areas that have been selected are the hard-core Socialist areas. It appears that the large soulless council estates on the edges of the city are not selected. They contain one in eight of our population and, according to the report "One in Eight" produced by a local voluntary organisation, the real problems exist in those areas.
Large parts of the inner city have been demolished and the population has moved out. That population is now found in the large council estates which form an are round the city. That is true of many of the large cities involved in the partnership arrangements. The populations have been displaced from the inner areas to the outer areas. When the Minister talks about the inner city he is really talking about the outer city, because that is where the population now is. By concentrating on something that has reduced in terms of population and effectiveness the Minister is making provision for the wrong place. Having done that in Liverpool, he has tried to have the best of both worlds. As a result of pressure from some of his hon. Friends who represent the other Liverpool seats, the Minister, after announcing the inner city partnership, declared another area five miles from the inner area as part of the inner area partnership.
I know the area well and I cannot see why he has included that area and not the vast, soulless and impersonal council estates where all the social problems are to be found. If the Minister has read about this subject he will realise that experience in American cities shows that the demolition of the inner city does one thing only; it transfers the problems and the people to wherever they are moved. Knocking down houses does not knock down the problems. Having knocked down the houses, instead of following the people and concentrating the help on them in the areas to which they have

moved—the green field arcs around the cities—the Minister is putting the money, 10 years too late, in the wrong place. We have a Bill which has missed the boat. It is concentrated in the wrong place at the wrong time.
The Government are as committed as I am to involving the community. They committed themselves, in paragraph 103 of the White Paper, to a new and closer form of collaboration.
May we now explore what happened in Liverpool? First, when the partnership was declared over a year ago much activity occurred. The Secretary of State was photographed in the main High Street and he was seen waving to the crowds. He said that he was going to rejuvenate the inner area. He attempted to establish a partnership committee. Naturally, more people wanted to sit on the committee, more committees were set up and more bureaucrats were created. One would have thought that the individual in the community and the voluntary organisations would have been included somewhere in the proliferation of committees which were being set up.
The fact was that the Minister thought it unwise to involve the voluntary organisations and the people. Perhaps he thought that they might have too much to say, or was it that as they might be the very people who would be affected by the decisions of the partnership arrangement they were the last people one would want to involve?
Not surprisingly, in about November of last year the voluntary bodies—by which I mean all non-statutory organisations—decided to form their own conference, so we have not only all the Government committees but a new conference of the voluntary bodies. A total of 177 people attended a meeting on 17th December last year. One hundred and fifty-three of them were from voluntary organisations, including community centres, settlements, community groups, youth organisations, social welfare organisations, community arts projects, community health councils, advice centres, voluntary housing associations and the rural preservation societies. None of those organisations had been involved at any time, in any way, in the partnership committees that had already been established to help just such people.
The regional director of the Department of the Environment said at the conference:
The Government has made a commitment in its inner cities policies and we have now reached the stage for putting this into practice. In Liverpool those of us concerned with the partnership agreement do want now to establish arrangements for drawing in the voluntary and community sector.
He continued by quoting the Government White Paper, which said:
It is impossible for the Government to succeed without the involvement of the community.
I emphasise those words. He added:
Although much thought was given in the drafting of the White Paper to community involvement and the role of voluntary organisations, the White Paper itself gives no guidance as to how the involvement should be formalised.
One would expect that by the time a White Paper was prepared the Government would have worked out how they would involve the community in the running of the project.
The regional director went on:
The Government has no intention of dictating either to local authorities or voluntary groups the job of establishing where the greatest need arises, and working out the best ways of deploying resources is primarily for local authorities to decide, working in close harmony with Government and the statutory agencies.
The conference concluded that that was the position at that date.
What has happened in the Liverpool partnership? It is as well to explain the committee structure. The committee is something like the Tower of Babel. There are more people than one can imagine all falling over one another down the main high street to attend partnership meetings. First, we have the chairman, who is the Secretary of State for the Environment himself. Then we have the hon. Member for Keighley (Mr. Cryer), who is the Under-Secretary of State for Industry. We have the hon. Member for Newcastle-under-Lyme (Mr. Golding), representing the Department of Employment. We have the Minister of State, Department of Education and Science, the hon. Member for Widnes (Mr. Oakes). There are officials from the Department of Health and Social Security and from the Department of Education and Science.
Those are not all we have on the partnership committee. We have the leader of the city council and the deputy leader. We have the leader of the Conservatives and the leader of the Liberals. Then, of course, there is the county council representation, with the leaders of the Conservative and Labour groups. There are also area health authority representatives. That is just one of the partnership committees.
Of course, all these people are very high-powered and they turn up only occasionally. Not surprisingly, the real partnership committee has met only twice in one year. Nothing much has happened, except for those two meetings, and many people think that there have been two meetings too many. The partnership committee having been set up without representatives of voluntary organisations or people living in the inner city area or community workers, an officer steering group was then appointed. This group consists of the chief executive from the Liverpool City Council, together with the city solicitor, the city treasurer, and the city planning officer. At county level there is the chief executive, the county treasurer, the county planning officer, and the county solicitor. There are also the regional director of the inner cities directorate from the Department of the Environment and a whole bevy of officials from various Government Departments, as well as the area health authority representatives.
That is why correspondence to these peoples is so seriously delayed. They are all too busy attending these meetings, and they have not got time to attend to the pressing business of rejuvenating Liverpool. They are all tied up with these committees.
The officer steering group decided that it could not really work out what needed to be done, or how to cut the non-existent cake, which I shall come to later. It then set up working groups, and these groups included groups on the economy, housing, the physical environment, leisure, community and recreational facilities, the social environment and transportation. On each of these working groups not one voluntary organisation was represented or one local individual involved.
On the economy group, the city treasurer is chairman, and there are other members. On housing, there is the deputy


city solicitor. On physical environment, the city planning officer is chairman. On leisure, community and recreational facilities, there is the officer responsible for recreation and open spaces. On social environment, there is the director of social services and on transportation, the county planning officer.
All these working groups have to meet, and when they meet they do so entirely with officials. They talk with officials and prepare papers which they do not circulate. Then they report back to the officer steering group, which has more meetings in camera and which then refers back to the partnership committee. But that is not all. There are other committees—

Mr. Deputy Speaker (Sir Myer Galpern): Order. The only one who seems to be missing at the moment is Santa Claus. I do not see that giving all the details of the existing committees is strictly relevant to the new clause that the hon. Member is proposing.

Mr. Steen: May I explain, Mr. Deputy Speaker, how this falls on all fours with the new clause? The new clause is an attempt to involve the people in the existing committees. In Standing Committee the Minister said that if we involve more people it means more committees. I do not think that we need more committees—there are too many already. The Minister can change the constitution of the committees by involving the community.
I suggest that there is no need for the officer steering group. If we do need some sort of steering group, why is it not possible to involve the people who run the settlement houses, the community associations, and the residents' groups in the inner cities? If we cannot do that and we must have a steering group, why do we need working groups of all the chief officers? Why can we not have working groups of the organisations that are playing a part in the partnership areas? If we cannot do that, why can we not at least involve them in the determination of the decisions in the partnership area?
I recognise that this is primarily seen as a partnership between central and local government and I recognise that the Liverpool City Council has agreed not only to the setting up of all those committees but to an inner area sub-committee of about 18 councillors. There is

also a policy and finance committee and the Liverpool City Council meeting, all these committees determining and discussing the partnership arrangements.
My first plea is that with all that myriad of members of the committees—as Mr. Deputy Speaker said, Santa Claus; that is what it looks like and how it appears to local people—it looks like complete cloud-cuckoo-land.

8.45 p.m.

Mr. Deputy Speaker: Order. For the accuracy of the record, I said that the only one missing was Santa Claus.

Mr. Steen: I am much obliged, Mr. Deputy Speaker.
I think that the Minister must get the message right away how cynical the Liverpudlians are about whether that partnership committee will have any relevance to anything going on in the inner city, and whether the people on partnership committees have really got the local grass-roots feelings about what is actually happening. By the very nature of the jobs of the people serving, they are so far removed from the day-to-day realities of the city's life that it is highly likely that when they produce their findings it will be seen that they are totally out of touch with what needs doing.
However, I must move on, because really what is in issue is not only the nature of the committees and the role that they have to play but what they are actually doing with what finance. That has regularly cropped up and it is important now to clear that out of the way.
As I understand it—perhaps the Minister will correct me if I am wrong—for these partnership committees, which are dealing with the whole gamut of the Bill as it affects the partnership area, the first sum of £11 million was for construction work, and that was for the period 1977–79. That was primarily loan sanction, so that really the local authority was asked to borrow about 66 per cent., and it would have to pay it back. So here we have a poorish local authority, the City of Liverpool, being actually told that it can borrow more money, to become poorer.
Then we have £30 million given to the inner city partnership programme over three years. That is £10 million a year, as I understand it. But that, again, is not a gift. It is 75 per cent. Government grant, but that is only towards interest


charges, so, again, the local authority is being told "If you want to take up this £30 million you will have to borrow, and you will have to borrow the lion's share of it."
Then we have only £2·5 million under the urban aid programme for next year, and £1·8 million for derelict land—the Minister knows my views on the amount of derelict land that there is on Merseyside—and there is some money for the construction industry, again.
In my calculations, all that adds up to is less money than the Government have already taken away in the shape of reduced grants to the local authority over the last four years, so that at the most the Government are replacing that which they have taken away, by letting the local authority borrow money that it has not got and so make itself poorer, in one of the very areas which is already poor. By doing that, they are excluding any of the people living in the area, so there is no chance that they will get any idea of what the Government are up to.
This was realised by the voluntary bodies. In February this year they held their second partnership conference. They were already alive to what was going on. They took the view that they should take some initiative. That is the strength and importance of the new clause. The voluntary sector, in the shape of Dr. Boaden, who is the lecturer in social administration at Liverpool University, then said that the partnership arrangements were fundamentally between local government and central Government. Between December and February the voluntary bodies began to become aware that the Inner Urban Areas Bill would not be amended and that the Government had no intention of involving the voluntary organisations. Dr. Boaden said:
Therefore, the voluntary sector will have to earn their entitlement to participation in order to have their say in how partnership works.
What a confession to be made at a conference that was attended by 147 people, with 123 representing voluntary organisations—namely, that the Government were not prepared to communicate with them and were not prepared to involve those on the partnership committees, and that they would have to become pressure groups. Is that what the Minister wants from the Bill? Does

he want to create conflict? Is his aim to create strife among the community by excluding them from the whole participatory process? That is how the whole matter is beginning to shape. The voluntary organisations feel that they have been taken for a ride.
I use the term "voluntary organisations" in the widest sense to mean all those in the community who feel that they are not part of the statutory sector but have something to offer. I am amazed to find that the Press releases that the Department of the Environment has issued from time to time—I refer to the one that was issued on 15th December, especially—are geared towards what the Government will do and how many meetings the Ministers will chair. We are told that the Secretary of State, for instance, will chair the Minister-Member level partnership committees in London Dockland and Liverpool, and that the Minister for Housing and Construction will chair the partnership committees for the partnerships in Birmingham, Manchester and Salford. There is not a word about voluntary organisations.
We are told that the Under-Secretary of State will chair partnership committees in Islington and Hackney and that the Minister for Housing and Construction will be responsible for the oversight of the other cities that have been invited to prepare inner area programmes.
The whole structure is Government-based and full of bureaucracy. Not a mention is made of those who are involved in the areas.

Mr. Alison: My hon. Friend is making an extremely important and valuable contribution. Is he able to tell me how many members of the Liverpool voluntary group would be represented by the local council of social services. Would they all fit within that umbrella? Could they be represented by one National Council of Social Service officer, or would they fall rather more outside the umbrella of the council?

Mr. Steen: I am grateful to my hon. Friend, as his intervention shows that we are thinking in the right direction. It is too easy to try to umbrella all voluntary effort and to say that someone from the local council of social services



will be able to represent all the organisations. That is rather like suggesting that to have somebody from the unions means that all the unions will be represented.
The National Council of Social Service will be a step in the right direction but in the minds of many in the various organisations the council is the establishment. If we are to have a representative from the establishment organisation, it would be as useful and constructive to have one or two other members from different facets, especially those to do with young people and settlements. To have three people representing the non-statutory sector would be a vast improvement on the exclusion of all people from outside the statutory sector.
I am not seeking to push the private sector on the Minister; I want to have more people on the committees. I firmly believe that those in the private sector have a great contribution to make within the structure, and that if they are not represented we shall miss out. The Minister will miss out and the Government will miss out if it is put outside the structure. That will create conflict and hostility between them and us.
That is the point that I was making 10 years ago when dealing with the first urban aid programme circular, and with all the successive urban aid programme circulars when I was directing a national voluntary body. Until the eighth circular the voluntary sector was not given its due, and its importance and relevance appeared not to be recognised. Naturally, local authorities tended to give their money, especially under capital grants, to the local authority schemes first. Only over six years or seven years has the balance been corrected. It seems that we are making exactly the same mistake as with the urban aid programme in 1968. If the Minister wants to learn from mistakes, he should put matters right after the second meeting and not wait until the scheme has been going for very much longer.
We need a change of heart by the Minister which will not consist merely of empty phrases but will have some reality. In Committee the Minister poured scorn on my suggestion that we should have voluntary organisations on the committees. He paid tribute to their great work

but would not put them on any of the committees. He said that we have enough already. I do not understand his thinking. If those living in the localities are not involved, on what authority do the Government seek to impose upon them?
If the Government are not sensitive to the people who are living in an area, by what right do they believe that they know what is needed? I believe that the new clause is desperately needed because, if the elaborate committee structure continues to exclude those who are living and working in an area, clearly there will be an increasing gap between what is needed and what takes place.
That is why, on 13th March, some six weeks ago, I asked the Secretary of State, in a Written Question, about the conclusions and the priorities that had been drawn up at the second Liverpool inner city partnership meeting. He replied:
I chaired the second meeting of the Liverpool Partnership Committee on Friday 10th March.
The Committee discussed key issues and priorities. It agreed that to improve the quality of life for those who live and work in the inner city, so as to minimise the outflow of population, must be the overall objective.
How can it be the overall objective of the Government to stop the outflow of population, which they say is the principal objective of this partnership committee, if the very people who are living there are told that their views are of no interest?

Mr. Loyden: The hon. Gentleman will be aware that, for instance, in the Garston constituency not only has the community council been very much involved in the partnership, but that, at the level of the community council, there has been an exchange of ideas. Therefore, the views of those people are certainly being expressed regarding the inner area partnership. Therefore, there is a direct involvement in that sense—it may not be much as the hon. Gentleman and I would like—with the community in the Garston area. I am sure that that obtains in the city centre as well.

Mr. Steen: I am sorry that the hon. Gentleman missed what I was saying. Before he came in I covered the range of the problems. Earlier I was talking about the National Council of Social Service and whether it would help if it


was represented on these committees. The community council is another body. That is a step in the right direction. The community council and the National Council of Social Service are very much established bodies in the vein of local authorities, and the people serving on them, I am sure the hon. Gentleman will agree, do not necessarily truly represent the kind of grass roots interests which he knows exist in Garston and which have a very different approach to matters from that of the professionals who are employed by many of these established and well tried voluntary bodies. But this is certainly a step in the right direction.
In answer to my Written Question the Minister sought to minimise the outflow of population as one of his prime aims. Yet, curiously enough, he is doing nothing to stop it. By refusing to redirect the regional grants to the inner areas and by refusing to find some incentive to get the skills back from the outer to the inner areas, there is no chance of stopping the flow outwards. The outflow is caused primarily by lack of jobs and homes.
Despite the Secretary of State, at the Habitat Conference in Vancouver in 1976, saying that we have pensioned off the bulldozer in Britain, it is clear from what is going on in some of our major cities that it has not got round to the bulldozer itself. It is still demolishing buildings and, as it demolishes them, people move outwards. Therefore, until the Minister blocks the bulldozer from demolishing another house, the population will of necessity move outwards. So long as he allows derelict and vacant land to be hoarded by local authorities and nationalised industries, we shall not get new industries building on land which would attract people back from the outer areas to work in the inner city.
9.0 p.m.
I am puzzled by the view of the Secretary of State that his aim is to minimise the outflow of population, when all the things he has done—which are minimal—will do nothing to halt that outflow. The Secretary of State's Answer continued:
Measures to improve employment prospects would make the most impact.
Nobody would disagree with that.
Other priorities in the physical and social fields were also discussed. Specific proposals

will be developed for the committee to consider at its next meetings ".
We do not know when its next meeting will be.
The committee also agreed on arrangements for consulting voluntary organisations as the work proceeds, including the establishment of a central information point on the partnership and the production of a news-sheet."—[Official Report, 13th March 1978; Vol. 946, c. 27–8.]
All the Government said in that parliamentary Answer six weeks ago about voluntary bodies was that they would be consulted as these partnership committees continued and that there would be a central information point, with a newssheet. In other words, that is all that the private non-statutory groups merit. I hope that the Minister, in his reply, will give us more information than we were given by the Government six weeks ago, because that earlier reply was not good enough.
The view of the voluntary bodies is that this Government, in common with all other Governments, make wonderful overtures and are full of friendly noises to those who are not part of the bureaucracy, but when it comes to giving up a little of their power and sharing it, they say "No."
The Minister cannot say that he is ignorant of what is needed to tackle urban deprivation. In the past 10 years successive Governments have spent about £100 million of taxpayers' and ratepayers' money in exploring a vast number of experimental projects with a view to identifying the problems and causes of urban deprivation and recommending how best they can be tackled.
It may be as well to remember what has taken place since 1968, because what has happened today is merely a repeat of all that we have had before. In 1968 we were told that the problem involved "pockets of poverty". That was the whole basis of the Government's approach. There was a "pockets of poverty" theory which started with the urban aid programme. That programme sought to divert money from the rural areas to the urban areas. What was needed to do that was some jiggery-pokery that would mean that the shire counties would be worse off and that the urban areas would be richer.
That was the start of the switch of the rate support grant which made so many


rural areas squeal, but which the Government propose should continue. But the urban aid programme has continued and has flourished. The Government are now committed to increasing that programme to a sum of £125 million—and they will do that only by diverting more money from rural to urban areas. The White Paper makes clear that there will be no new finance.
In 1968 we had the "pockets of deprivation" theory, and we have returned in a full circle to that same situation, but in 1968 it very much involved the Government only. The Government said "We shall set this up with the Home Office and no voluntary bodies will be involved."
Perhaps I can remind the Minister what was said in 1968. The present Prime Minister, who was then Home Secretary, said that the purpose of the urban programme was to
provide for the care of our citizens who live in the poorest or most overcrowded parts of our cities and towns. It is intended to arrest, in so far as it is possible by financial means, and reverse the downward spiral which afflicts so many of these areas. This is a deadly quagmire of need and apathy."—[Official Report. 2nd December 1968; Vol. 774, c. 1107.]
The first urban aid programme circular went out to the local authorities and to deprived areas to make bids for the money which the Government intended to put up in the form of loans. It was said that
The Government propose to initiate an urban programme of expenditure mainly on education, housing, health and welfare in areas of special social need.
That is the same phrase that is used in the Bill. It was used 10 years ago and is still related to the same areas.
The circular continued:
Those were localised districts which bear the marks of multiple deprivation",
—that expression has now gone out of fashion—
which may show itself, for example, by way of notable deficiencies in the physical environment, particularly housing; overcrowding of houses; family sizes above the average; persistent unemployment; a high proportion of children in trouble or in need of care; or a combination of these. A substantial degree of immigrant settlement would also be an important factor, though not the only factor in determining the existence of special social need.

In 1968, therefore, there was exactly the same picture as we have today, except that things were not quite so bad then. One thing which can be said about poverty programmes is that they have accelerated the poverty. There was the view in 1968 that we could conquer the problems of urban deprivation by tackling the pockets of deprivation. It is rather like a spring cleaning exercise, in which one goes into a small area and cleans it up, expecting the problems to disappear over a much wider area.
It was not simply the urban aid programme which concentrated on the "pockets" theory. The community development project also concentrated on that theory. The Minister will remember the aim when that project was set up contemporaneously with the urban aid programme. The community development project was based on three assumptions. The first was that it was the deprived themselves who were the cause of urban deprivation—

Mr. Guy Barnett: The hon. Gentleman has an important new clause down for our discussion, but I have difficulty in understanding that what he is now saying has anything to do with voluntary organisations, which is the subject of the new clause.

Mr. Sheen: I am most grateful for the intervention. I had hoped that the Minister was following my speech. This is rather advanced social philosophy, and I hope that I can explain exactly where I am going. What I am saying is that—

Mr. Deputy Speaker: Order. It may be a matter of history, but I was wondering whether we ought to be considering what happened 10 years ago. I have no desire to interrupt the hon. Memeber for Liverpool, Wavertree (Mr. Steen) in his thoughts, because I am comforted by the knowledge that he has probably only another two minutes to go before completing his 45-minute speech.

Mr. Steen: I shall try to consolidate the history, because, as you rightly pointed out, Mr. Deputy Speaker, that has perhaps only some bearing on the new clause. But it has an important bearing, and the importance of it is this. The community development project, the urban aid programme and the educational priority areas experiments, all in the late


1960s, concentrated on the pockets of deprivation theory. This was that the Government, together with local government and a whole army of professionals on deprivation, could descend on pockets of poverty and solve all the problems alone. The one thing that was learned from those experiments was that those problems cannot be solved if the people who make up the problems are themselves excluded.
It will be recalled that there was a series of projects, of which the community development project and the educational priority area experiment were but two. There were many other projects which flowed from there. There were the neighbourhood projects, the quality of life schemes, the inner area studies, and the urban deprivation unit, together with a department dealing with community programmes. There were also the urban guideline studies, the transmitted deprivation theory, and the quality of life theory. Then there was the comprehensive community programme and the GLC deprived areas programme. Now the EEC has joined in with its own programmes to tackle cycles of deprivation.
What I am trying to give, in a very short summary form, is the global picture that we have in this country of urban deprivation getting worse, in spite of these multi-million pound projects which have taken place throughout the last decade, which have concentrated on various aspects of poverty, but which have all pointed to the same conclusion, namely, that it is not money alone that is needed but the process by which the community is involved in tackling its own problems. Some people have called it self-help, but it is the total involvement of society in tackling its own difficulties rather than bringing up by train from Whitehall troops of Government officials and Ministers to walk down the local high street, hold a meeting and then go back again.
That is the one thing that these experiments show. Perhaps the Minister will have the humility to realise that these £100-million schemes should have taught us something—that the Inner Urban Areas Bill repeats all the mistakes. It is something like a T. S. Eliot poem—we have been here before, there is nothing new in it, and it is doing nothing that is likely to solve the problem.
I move on from the history and concentrate on how the new clause will help. What it really aims to do is what the director of the National Council of Social Service so vividly pointed out in a pertinent letter which he wrote to members of the Committee. He said:
I am writing to you about the progress of the Government's inner cities programme. Since the publication of the White Paper Policy for the Inner Cities', the NCSS has been monitoring the inner cities programme through a network of voluntary organisations in each of the seven partnership areas and the fifteen programme authority areas. Our current concern is the progress being made towards the involvement of local communities and voluntary organisations as a part of the inner cities programme; an involvement that the White Paper seeks to achieve. (Paragraphs 34, 35, 103).
The initiative for revitalising the inner areas of cities lies with central and local government, yet the programme will make little long term impact unless it gains the support and commitment of the local community, voluntary organisations, trades unions and local bust ness communities. Although Ministers have called for this broader partnership in the planning and implementation of inner area programmes, in practice there are severe difficulties in gaining this involvement in most of the partnership and programme authorities. The major concerns expressed to us by local voluntary organisations can be summarised as follows:

1. There have been long delays in seeking the involvement of local organisations and community groups. It has not been sufficiently well understood that this needs to take place from the outset to be successful.
2. The timescale imposed on local authorities by the Department of the Environment for drawing up their inner area programmes for the next three years is so tight that firm proposals are being required by June or July of this year, leaving insufficient time for consultation and involvement.
3. Ministers have not pressed the local authorities to establish an adequate framework for the involvement of local communities and voluntary organisations. Apart from Newcastle-upon-Tyne, Islington, Leicester and Sheffield, which have developed such a framework, in volvement has been piece-meal.
4. With few exceptions, the quality and quantity of information being made available by local authorities is inadequate for local organisations and local communities to identify opportunities for involvement and make a proper contribution to the planning I rocess.
5. In most of the areas, local councillors have not been adequately briefed on the background work being carried out, and cannot act as an effective link between local communities and the authority."

If that is not a damning criticism of the Government by a national, independent voluntary organisation—co-ordinating all


the voluntary organisations in the country—I do not know what is. I hope that the Minister will take very seriously the comments of one of the largest and oldest co-ordinatory bodies in the country, because these five points encapsulate and symbolise the cry from the voluntary organisations over the last decade that Government do not involve them or consult them in the decision-making process which affects the cities.
It is strange that a Government who so closely identify with the shop floor should in this case be baulking at the involvement of the community. Here are a Government committed to helping the underprivileged and the deprived, yet this Bill, which is supposed to help them in the worst areas of deprivation, decides that they should be excluded from the way of helping them.
The Minister may reject this as poppycock, but I hope he realises that what I have been saying is reality. He may have been briefed by his bureaucracy to believe that what I am saying is not so, but I have got this information straight from the rock face and from the grass roots. What I am saying happens to be true.
I ask the Minister to explain why, after all these months, he has not attempted to incorporate a new clause into the Bill and whether, if he cannot accept this new clause, he will undertake to draft one to provide that the voluntary bodies have a much greater say in the running of partnership committees.
9.15 p.m.
By now the Government ought to have learnt that participation, which is at the root of most of their legislation and is the basis of many Government reports, in practice is not taking place. If the Government want participation, they must be prepared to trust people. We are beginning to find, however, that when we have a Government which do not trust the people, that Government do not do their best for the people. They do not hear or understand their cries of concern. Unless those cries are heard, however much money and however many officials the Government devote to any given cause they will not get it right.
The results of many urban experiments show that it is not the money which matters. What matters is the process by

which conclusions are reached. It is for that reason that this clause is of such crucial importance. Without it, the Bill might as well never have come before us, because it is of no consequence. The Government must not think that merely setting up a bit of machinery, giving a few loans, geographically dotting a few spots round the country and having a debate in this House will have any consequence for the people living in those areas. People know that it is a sick joke. In this clause, I am trying to prevent its becoming too serious a sick joke. If that should happen, despite all my efforts, people will no longer trust any Government to help the most deprived areas.
The Minister can no longer hide behind his fine words. The public must be told the truth—that this Bill will have no impact on the lives of people living in inner city areas and most certainly will not rejuvenate those areas. If people are not allowed to play a part in the discussion and decision-making process, there is unlikely to be any improvement.
When the Minister rises to reply to this debate, let us remember that he is breaking faith with the people of our inner city areas if he does not give them an opportunity not merely to be heard but to be involved in all that is to happen there. If he rejects that wish, he will be turning his back on them and saying that they are of no consequence.

Mr. John Sever: I shall attempt to put to the House one or two observations on the situation which applies in Birmingham, and I hope that I shall be a little more expeditious in doing that than the hon. Member for Liverpool, Wavertree (Mr. Steen) has been in representing the interests of his city.
I was fascinated to hear the hon. Member for Wavertree refer to the lack of co-ordination which seemingly exists in his city among Members of this House, the local authority and what he described as the grass roots community. I wish that before beguiling us with such a long speech he had spent a little time discussing this measure with the Conservative leader of the Birmingham City Council. I do not think that these two people agree with each other, and the speech of the hon. Member for Wavertree would


perhaps have been more credible if he had argued the same case for two cities which are controlled by the same political party.
We must recognise that a considerable amount of authority must be given to local authorities in determining what should happen in the work done by the inner city partnership committees. In Birmingham, the Conservative-controlled city council decided that it would not take on its partnership committee representatives from the very areas that we are discussing.
Several members of the local authority have an interest in representing inner urban areas. I probably have a unique experience in representing an inner core area both here and on the Birmingham City Council, and I live in the middle of a partnership area. So perhaps I have some idea of local people's views.
Therefore, informally, I asked the head of the local authority to extend the membership of the partnership committee to include not only one representative of opposition parties but some who actually lived in the areas under discussion. He refused. I asked him publicly, because both I and my constituents were getting upset. Again he refused.
In some desperation, I asked the Minister of State, Department of the Environment, whether local authorities could be encouraged to extend the membership in the light of representations by local councillors or Members of Parliament. His reply, in effect, was that we should ensure that local authorities take the representation on these committees into their own hands. As one schooled in local government, I accepted the tenor of that argument, although the committees in local authorities controlled by the Conservative Party did not apply that practice.

Mr. Eyre: Has the hon. Gentleman thought of asking the Minister to invite an Opposition Member of Parliament to serve on the partnership committee?

Mr. Sever: I have no doubt that if that question were asked, the Minister would give a fair and reasoned answer. Presumably hon. Members have the right to ask such questions tonight. It seems as though someone might.

Mr. MacKay: I am trying to follow the argument. Is the hon. Gentleman suggesting that in Birmingham the Conservative local authority should co-opt to serve on these schemes a member of the Labour opposition group? That is a reasonable suggestion, but is it not equally reasonable, when the Minister is having consultations, to invite Opposition Members of Parliament? The hon. Gentleman cannot have it one way only.

Mr. Sever: I was not discussing whether the Conservative-controlled local authority should invite Labour Members, but certainly it should invite representatives of the areas concerned. Because those in the areas recognise the value of Labour representatives, they happen to be the same individuals, but that is coincidence.

Mr. Steen: I agree entirely. That Conservative council should be asked to involve local people, just as the Labour council in my city should. The more people involved at the right levels, the better.

Mr. Sever: I was going to deal with that question in my next remarks. The hon. Member has suggested that thousands of voluntary organisations are anxious to play a part. How are we to sort out who represents the grass roots on those committees? I do not know whether it is a practical proposition. However, it would be reasonable to say that tenants' associations, community groups and so on could find a channel through local public representatives on the partnership committee.
Had there been a greater input of local authority representatives, remembering that they are elected by the people about whom we are talking, to express the views of housing associations, tenants' groups and so on, there might have been a much more balanced view from the community being put forward to the partnership committees. That is the only regret that I have about these measures.
Having spoken to a large number of the groups to which we have referred in my area, I have found that they are pleased that we have been able to secure the Minister for Housing and Construction as chairman of the committee to look after the affairs of Birmingham. I put on record the views expressed to me and I


hope that the work done by the partnership committee in Birmingham will result in happy solutions for those with whom I am pleased to associate as a resident of one of the central areas of Birmingham.

Mr. Arthur Jones: I sympathise very much with what my hon. Friend the Member for Liverpool, Waver-tree (Mr. Steen) has proposed in his new clause. To some extent he is pushing at an open door. I hope that that is a proper interpretation. When we were discussing this matter in Committee the Minister said:
Clearly, the Opposition recognise, as we do, the vital importance of involving local industry and local voluntary organisations."—[Official Report, Standing Committee A, 14th March 1978; c. 346.]
The problem is how local industry and local voluntary organisations should make their contribution to the solution of the inner area problems. I was critical in Committee of the vast bureaucracy that was being developed and of the fact that Ministers were involving themselves personally in the work. I thought that it should be left far more to the local authorities under the promotion which is being offered by central Government.
I like to make a cost-benefit analysis in this type of operation. I can imagine the cost and the time of Ministers that will be involved if there are to be the plethora of committees to which my hon. Friend the Member for Wavertree referred. It will cost, in community terms, a vast sum in public expenditure, both central and local. I plead for an approach which will give us a streamlined administration for the important contribution which I hope the Bill will make towards a solution of inner citiy area problems. My plea is for widespread representation, but a streamlined organisation so that we may be conscious of the cost of administration. I can envisage the cost of administration almost equalling the amount of Government subsidy that is to be put in. Vast sums will accumulate in terms of the time spent and the overhead costs, and only a very small sum is being allocated.
We are essentially concerned with the optimum use of resources. We have not had a positive response from the Government. I am sure that the matter must have been in their minds, although I am

suspicious of bureaucracies. Initially, the scheme has to be got off the ground, but we must consider the administrative costs involved. I hope that the Government will look for ways of reducing these costs to a minimum, while meeting some of the points made by my hon. Friend the Member for Wavertree.

9.30 p.m.

Mr. Loyden: I shall be brief, but I want to take up some of the points made by the hon. Member for Liverpool, Wavertree (Mr. Steen) who raised a number of questions in relation to the history of Liverpool and the involvement of the community in the inner urban programme.
As I pointed out in an intervention during the hon. Gentleman's speech, the community council in Garston has a broad representation from the whole community and its members range from representatives of the Speke Tenants' Association to play-group leaders. It includes representatives of almost every activity that takes place in the community. The hon. Gentleman's argument does not stand against that evidence of very great involvement of the people in the community council.
In addition, the community council, in turn, has a very close relationship with the inner area committee. Officials discuss the problems of Garston with the community council and present the problems to the inner area committee for consideration.
If there were direct representation of all local groups on the inner area committee, we would have a plethora of meetings in the area, many of which would develop into mass meetings. Almost every organisation is run on the basis of representative democracy. People are elected through every tier of the organisation concerned right to the top. That is how the relationship between people on the ground and the inner area committee will develop.
When we formalised the tenants' liaison committee in Liverpool, it became bureaucratic. Members were elected from the grass roots, but when they became members of a statutory committee they ceased to be rational people and their bureaucratic tendencies were as bad as those of some of the bureaucrats referred to by the hon. Member for Wavertree.
People representing grass roots opinion who know the problems of an area should not become enmeshed in the bureaucratic machine but should use their knowledge and experience of activities in the area to see that the ideas of local people are projected in the proper way to various committees and, through local representatives and pressure groups, receive proper consideration.

Mr. Steen: Will the hon. Gentleman give way?

Mr. Loyden: No. The hon. Gentleman spoke for more than 50 minutes and I wish to make a brief speech. I am not being inconsiderate. Other hon. Members also wish to speak.
The experience in Liverpool has not been understood by the hon. Member for Wavertree. Contrary to rumour, the decline of Liverpool did not start when he came there, but things have got worse since then.
In the early post-war years the whole of Liverpool's housing slum clearance problem was thrust upon the local authority. At that time I was politically active in the city. The people who lived in these deplorable conditions demanded that action be taken. I readily admit that terrible mistakes in planning and rehousing were made. We virtually evacuated the city and for the sake of expediency we moved the people out of the slums. They had lived there since the turn of the century and some of them would still be there if it had not been for that massive housing programme.
Post-war rehousing in Liverpool led to monumental mistakes. It has been a major problem. The population decline which followed that programme created a major problem. The decline of industries such as docks and warehousing is another problem for Liverpool.
The community fully understands the problems. People have been taking a greater interest in their affairs. In every locality in Liverpool there are committees in which the community is deeply involved. The people are involved in housing, sporting activities, youth, festivals and carnivals. They are beginning to develop their own interests and a greater degree of community involvement. But none of this is meaningful without resources to overcome the deprivation.
Some people seem to be saying that nothing should be done and that the people should pull themselves up by their boots out of the quagmire. That is A-level sociology. We are fed up with that. We want to see practical steps to deal with the problems. The community is becoming involved in these problems.
I and other hon. Members will watch carefully to ensure not only that the people are heard but that action is taken. Any other attitude would miss the point. The communities do understand the problem, but they need help. Without administrative support, community organisations run into trouble. When that happens the whole concept is put in doubt.
As the hon. Member for Wavertree said, New Clause No. 9 kicks at an open door. I believe that the Government's intention is that there shall be community involvement. That involvement has already been established. It needs refining. I believe that that will happen and that we shall see the community involved in the decisions taken by the partnership committees.

Mr. Robin Hodgson: I hope that the hon. Member for Liverpool, Garston (Mr. Loyden) was right when he said that we are kicking at an open door. My hon. Friend the Member for Liverpool, Wavertree (Mr. Steen) gave a detailed analysis of the problems and the importance of voluntary organisations becoming involved. I should like to underline what he said about the feeling of helplessness and hopelessness that still pervades many people who live in the areas that are to be covered by the provisions of the Bill. They live in poorer houses, they have poorer educational opportunities, poorer employment prospects and poorer environment. They get the feeling that the Government machine is a juggernaut which will roll on remorselessly. They feel that nothing that they can do or say will affect its progress.
It might be true that in certain areas voluntary organisations are involved in the way suggested by the hon. Member for Garston. But once civil servants have charge of a programme—with their extra power and resources and the fact that they are on the job 24 hours a day, that they have money, departmental desks and offices—voluntary people working in their


spare time, who are often worn out after a day on the factory floor or at an office desk, feel that they will be left behind and that they cannot keep up with the remorseless grinding of the Civil Service machine, whether at national or local level.
Therefore, this evening we should see a way to make it clear that the voluntary movements have a statutory right to be involved, so that the process by which they are gradually pushed out and made less and less relevant can be prevented.
Above all, there is a lack of involvement of most people in their local communities. The representatives and chairmen of voluntary groups, community groups and neighbourhood bodies are the opinion formers who will get people involved. That will not necessarily happen if we leave it all to be a matter of by guess and by God, which was rather the approach advocated by the hon. Member for Garston.
I would draw the Minister's attention to five specific areas of voluntary association which I hope he will see underline the importance of the new clause. The first is characterisation by housing, by tenants' associations and residents' associations, all of which are an important means of contributing to the local scene and making sure that housing is kept up to scratch, that council housing estates remain in good condition and that people feel an interest and involvement in how their estate is run and managed.
The second area is characterisation by employment and trade. On the one hand, there should be involvement of the trade unions and on the other of the chambers of commerce, because they are in touch with local employment prospects. They know what is required. Perhaps even local pressure groups should be involved—perhaps the local garage proprietors' association or the licensed victuallers' association. People who keep pubs are often very much in touch with the grass roots.
Then there is characterisation by incapacity. The handicapped, the blind, those who suffer from a physical defect, also have a role to play in making sure that their community is planned in a way which will minimise their suffering resulting from their physical incapacity.
Next there is characterisation by physical services to the community—the WRVS, with its meals on wheels, the Red Cross, the St. John's Ambulance Brigade, and others who are making a physical contribution to the welfare and well being of the community.
Finally, there are those who provide psychological services to the community—marriage guidance counsellors, the Samaritans and similar people.
Those five categories are the people who are in touch with what is going on in the areas in which they do their work. It is easy to say that civil servants, particularly local government officers, can keep in touch, and no doubt they try, and to a certain extent succeed, to reflect what is going on locally. But they are always in a "them" and "us" situation. It is always "them" from City Hall and "us", the people on the ground.
The representatives of the voluntary bodies, the tenants' and residents' associations, trade unions and employers, are the people who really know what is going on and can make a positive contribution to making sure that the money that is being spent is spent in a way that is most effective and likely to have the maximum impact on improving the environment of the inner urban areas.
I hope that the Minister will bear these points in mind when he replies and will respond constructively to this important new clause.

Mr. Bruce George: I hope that the Conservative enthusiasm that we have heard in the past few hours for democracy in resolving the problems of inner urban areas will be transferred to the industrial sector. Certainly the eulogisation of democracy will be an encouragement to my right hon. Friend the Secretary of State for Employment in deciding his attitude towards the Bullock Report.
All the Walsall Members are present for this debate. Our town cannot claim to lead the country in many things, but we can proudly boast of the non-partisan approach to the problems of inner urban areas exhibited there over the past two months. In Walsall we have begun to realise that considerable problems of urban areas will not be resolved by any partisan approach. While one can fight over some of the issues, clearly the


vicissitudes of electoral fortunes mean that one party is in office locally and then two or three years later it is thrown out.

9.45 p.m.

Mr. Hodgson: I hope that the hon. Member will not forget in passing the very good relationship between our local authority and the various voluntary bodies that already exist, such as the local marriage guidance council.

Mr. George: I accept the point that has been made. In our area it is realised that some issues must transcend party political differences. We are seeing the beginnings of a movement in which the local authority, the three Members of Parliament, voluntary organisations, the trades council and the chamber of commerce are all pooling their collective resources and intelligence in order to resolve the underlying problems of Walsall.
I very much welcome this Bill which is seeking to devlop an approach to problem-solving which is very different from the solutions hitherto devised, where decision-making has been regarded as the monopoly of a small number of people, be they elected members or officers.
The talent available in any town is considerable and wish that officers and elected members in some local authorities would bridge the gap between themselves and their expertise, on the one hand, and the people in the community, on the other. One should not denigrate the talents and expertise of officers. If officers were here they would argue that if they were allowed to have their heads they could put their solutions into effect, and perhaps we would not be in the position in which we find ourselves today.
I can think of a number of areas in which highly qualified officers have been so constrained by people who profess to know that their solutions have, in fact, been shelved. I hope that when we extol the virtues of democracy we shall not denigrate highly competent officers who often find their solutions and their training being undercut by people who seek to impose half-baked solutions.

Mr. Ivan Lawrence: I shall not detain the House for too long—

Mr. Speaker: Order. May I inquire whether the hon. Member for Walsall, South (Mr. George) had finished?

Mr. George: No, I was giving way to the hon. Member for Liverpool, Waver-tree (Mr. Steen).

Mr. Speaker: Order. The hon. Member for Liverpool, Wavertree (Mr. Steen) took 55 minutes in proposing his motion. He has already interrupted twice. I am just reminding the House of that fact.

Mr. Steen: I will remember that, Mr. Speaker, in any future interventions that I may make. I just want to say that of course we must realise the way that officials feel, and recognise the fact that somebody, somewhere must make decisions. But the whole basis of democracy is to encourage people not to be apathetic and to be involved. That is the whole purpose of recording Parliament—to involve people in our deliberations.

Mr. George: My enthusiasm for democracy was almost dissipated by the length of time that it took the hon. Member for Liverpool, Wavertree to expound his views. You, Mr. Speaker, have admonished me in the past for making speeches that were a quarter as long as his.
As I was saying, the bipartisan approach is important. I hope that some elected Members are prepared to admit that they do not have a monopoly of expertise in any area. If they seek advice from the community and do not shun it, we shall be well on the way to meeting and overcoming our problems.
I welcome the Bill and I hope that our area of Walsall will hear from the Minister that it has been included in the list of those designated for special powers under the Bill.

Mr. Lawrence: I am much obliged, Mr. Speaker, for being called to speak now. I am sorry for being too much on my toes a moment ago.
From listening to part of the speech of my hon. Friend the Member for Liverpool, Wavertree (Mr. Steen), I can well understand why it is so necessary for him to take such a long time dealing with the problems posed by the Bill, coming, as he does, from Liverpool. The Sub-Committee on Social Services and Employment of the Select Committee on Expenditure has just visited Liverpool. It is an area of the most astonishingly high level of unemployment. All the



work done by my hon. Friend and other hon. Members who represent Liverpool ought to humble those of us who live in more fortunate parts of the country, where the unemployment level is not so high. By great effort and great determination those who live and work in Liverpool attempt to cure what is an extremely unsatisfactory social position there. Therefore, I, for one, would always excuse my hon. Friend for however long he takes in dealing with the problems, since he does so well on behalf of his constituents.
I shall detain the House for only a very brief period for Burton on Trent is not, alas, one of the areas that will benefit from the provisions of the Bill. However, I support the new clause, inelegant in wording as it may be, because I have learned two very impressive lessons in the short period of four years or so during which I have had the privilege to represent my town and area.
The first lesson is that we must do something more to reduce the ill-feeling that often exists between the ordinary citizens of an area and the bureaucracy that administers them. That is not to say that the bureaucrats are bad. In my particular area they are exceptionally good. However, the mere factor of geography, the fact that as regards social services and matters of that kind the people of Burton on Trent have sometimes to go 40 miles to Stafford—that is not something that the elderly can easily do—and the delays involved, have caused the conflict that has grown up between the local bureaucracy and the feelings of ordinary people, particularly the elderly. This is a matter that we must consider very seriously. It has impressed me no end since I have been the Member of Parliament for Burton.
The second lesson is that one of the most impressive things that I have noticed is the immense amount of dedication, wonderful work and contribution to local life that voluntary organisations have made. I therefore ask myself: can we not bring these two impressive features that I have noted during my time as a Member of Parliament into closer unity? Can we not use the latter more to help relieve the oppression of the former? Can we not say to voluntary organisa

tions "Come in and help to remove some of the abrasiveness, some of the sharp edges that exist between local bureaucracy and the people"?
After all, it is the local voluntary associations that frequently have most to do daily with the real grass-roots needs of the people. It is a good thing for the Government to say in their White Paper that this is a significant feature that they want to introduce. After listening to my hon. Friend the Member for Wavertree, it seems to me to be a bad thing to hear how wishful was that thinking, and how little the Government have come to fulfil that proud thought in practice.
We must appreciate that a number of other benefits would flow from involving voluntary organisations—I shall not list them, but in Burton they are good, as the Under-Secretary would imagine—and bringing them into the decision-making processes in regard to improvement of the environment, employment opportunities and the general activities of local communities. First, it would help the local bureaucracy to have a more human face. It would help the decision-making process to be brought home more closely to ordinary people, who are suspicious of bureaucrats but are not suspicious of the local men and women who appear on their doorsteps in moments of need, far more immediately than other social services or other organisations can appear. Therefore, it would help in acceptance of the decisions that need to be taken in the administration of the community if prominent in the decision-making process are the voluntary organisations that the local people respect so highly.
Secondly, those who work in the voluntary organisations so often feel—it is true that they feel it at a later stage, but they none the less feel it—"Is it all worth while?". They feel that they are banging their heads against the wall of local bureaucracy. To give them the sense of involvement would help to keep them more enthusiastic, more determined, if that is possible, than they may be by realising that in the end the great monolithic organisation will be brought down upon them to stop their dearest wishes being fulfilled.
After all, participation is the feature that helps to give most enthusiasm to those who are participating. If we want


to invigorate local voluntary organisations with an enthusiasm for the necessary decision that administrators have to take in the area, there can be no more effective way of doing so than to have the voluntary organisations involved in the decision-making process.
Thirdly, if a voluntary organisation is helping in the decision-making process, we may be saving some money. We may be putting some of the burden that otherwise has to be shouldered by paid servants—in some instances quite highly paid servants of the State—on to the shoulders of those who are quite happy to accept it for no recompense. In a way we would be spreading the decision-making process, but spreading the burden on to shoulders that are inexpensive for the taxpayer and ratepayer.
It is a benefit that we can rely upon the expertise, the local knowledege and the understanding of a local situation of voluntary organisations without having to pay them for it. All these advantages are so substantial that it alarms me that the Government have done so little to bring about the greater involvement of local authorities in the past four years. I realise that the Government have not in the past thought that their greater involvement was a good thing.
I support the clause. I do so because I think extremely highly of all those who work in voluntary organisations, especially from my experience in my part of the country. Those who undertake such work do so not expecting a reward, honours or benefits. After all, very few of them are given that sort of recognition. They do the work because they are human beings who are determined to serve other human being in the best way that they know how. It would be tragic if we ever allowed the administration of local government to move away from the influence and help of such people.
I commend the clause. I hope that it will be more elegantly worded, but I hope that the Government will accept it as a worthy addition to the Bill.

Mr. Tom Litterick: Having listened to one or two Opposition Members explain what they mean by representatives of non-statutory organisations, I feel that they have done the cause of the new clause no good. None of us is given the gift of seeing ourselves

as others see us, but I can say that Conservative Members have painted an image of non-statutory bodies that is revolting, as the classic Tory activist patronising defenceless people. That was done especially by the hon. Member for Burton (Mr. Lawrence).
Opposition Members have painted an image of the very people who are a menace to the residents of the broken-down, run-down, decadent working-class districts, who want nothing less than to be patronised by middle-class people from cushy middle-class areas who do not know what it is like to live in the worst areas of our cities. In Selly Oak we are bedevilled by such people. They are involved in a major industry. There are middle-class people going around patronising working-class people and telling them what they want. Their actions amount to that.
I suggest to Conservative Members that they should be careful about going over the top in pursuit of their traditional interest of keeping the Tory infrastructure strong. That is what the charity and voluntary organisations within the Tory Party are all about. If they do not believe me, they should read a book called "The Body Politic", whose author's name is—

It being Ten o'clock, the debate stood adjourned.

Orders of the Day — BUSINESS OF THE HOUSE

Ordered,
That, at this day's Sitting, the Inner Urban Areas Bill and the Home Purchase Assistance and Housing Corporation Guarantee Bill may be proceeded with, though opposed, until any hour.—[Mr. Graham.]

Orders of the Day — INNER URBAN AREAS BILL

Question again proposed, That the clause be read a Second time.

Mr. Litterick: Opposition Members should read a book called "The Body Politic" whose author's name is Ian Gilmour. That is what is on the cover. He quite explicitly says that one of the perpetual sources of strength of the Tory Party is the voluntary and charity organisations. With his characteristic cynicism, he says that that is how the Tory Party keeps its activists sweet and happy.

Mr. Lawrence: You are as mad as a hatter.

Mr. Litterick: In other words, charity is a racket with the Tory Party. It is a political implement. If Opposition Members do not believe me, I suggest that they read the book, which has been written by one of their own Front Benchers whose cynicism is well known in this House.
Opposition Members have done the proposition a great deal of mischief, and I am rather glad. When I think of non-statutory bodies in this context, I think of organisations of people who reside in these blasted areas—

Mr. Steen: The National Council for Civil Liberties.

Mr. Litterick: —which voice the needs and desires not of somebody else but of themselves—the people who have to endure living in these god-awful districts. That is my idea of an appropriate non-statutory organisation. It is most appropriate.
Selly Oak has one such organisation, called the Selly Oak Development Com

mittee. It was formed in response to the drafting of the Bill. The battle being fought by these people is a battle to have Selly Oak represented on the inner area committee, because they know that they suffer from precisely the same urban diseases as are endured in areas included in the boundary definition. But these people actually live there. They suffer from those conditions. They are not middle-class people patronising somebody else. That is my idea of the kind of people who ought to be incorporated into the workings of the partnership committees. In Birmingham, as has been said, that is not likely to happen as things stand, because the partnership committee is run on purely partisan lines.
For all the Opposition's talk about participation, for all their furtive grinding of their party political axe, not one hon. Gentleman mentioned that working people ought to be involved. The phrase does not do come easily to their minds. They mean their own kind, doing their hellishly patronising subversive job among the British people in the devastated cities.

Mr. Guy Barnett: We have had an interesting and wide-ranging debate. I am not sure that I shall be able to do justice to the speeches which have been made this evening. I am quite certain that I shall not do justice to the speech made by the hon. Member for Liverpool, Wavertree (Mr. Steen) judging by the comments that he made on the responses that I made to his remarks in Committee. Nevertheless, I shall try.
A great many of the remarks made during the debate have been extremely interesting and have been based upon personal experience by hon. Members on both sides of the House of voluntary organisations.
I hope that the hon. Member for Wavertree, the mover of the new clause, will recognise that though from time to time he doubted my credentials concerning voluntary organisations and presumably those of the Government in general, many people besides himself have an active interest and belief in voluntary organisations and the part that they can and should play in the community.
The White Paper illustrates this point in paragraph 34 which says
Involving local people is both a necessary means to the regeneration of the inner areas and an end in its own right.
That is a statement of Government policy. However, we are being asked by the hon. Member for Wavertree to bring in a law on this subject. Do we want a clause written into this Bill—a Bill which has a limited purpose as part of our urban policy? Do we need a clause about voluntary organisations in a Bill which does not purport to cover the whole range of our present policy.
The purposes of the Bill are quite clear. They relate to grants and loans and similar matters which may be of use and value to local authorities in seeking to encourage local industry in their areas. I do not believe that it is desirable to have in this Bill provisions relating to the value of voluntary organisations. If we do not include such a provision, it does not mean that we are denying the value and importance, of such organisations. Indeed, our commitment to such organisations is contained in Part IV of

the White Paper which from paragraph 34 onwards deals with this topic.
A great many things have been said in this debate about how we should seek to involve voluntary organisations. When dealing with partnerships or programme authorities, it is important to recognise that the meaning of the word "partnership", as we are using it, is first and foremost a partnership between statutory authorities. It is a recognition of the fact that if we are to tackle the deep-seated problems of Liverpool, Hackney and Islington, and the docklands area we need concerted action by the statutory organisations which have statutory responsibilities to fulfil.
Perhaps it is a criticism of Government in the past that the statutory organisations with responsibilities and powers have not worked closely enough together and not in a sufficiently co-ordinated fashion. The use of the word "partnership" has also been applied to the relationship between the statutory organisations and the voluntary ones. Indeed, private enterprise, the trade unions and other organisations all have a part to play. However, this does not mean that it is necessary to formalise that relationship by seeing that representatives of the voluntary organisations sit on the partnership committees. If hon. Members complain about bureaucracy of partnership committees, what worse bureaucracy would arise if a large number of representatives of voluntary organisations were also sit on those committees?
I was glad that my hon. Friend the Member for Liverpool, Garston (Mr. Loyden) stressed that we should not try to bureaucratise the voluntary organisations by enmeshing them in the machine, as he put it. How right he was to make that comment. I have heard some people talk of the need to harness the energies of the voluntary organisations as though that was our objective. But I want to release those energies and give those organisations the opportunity to make their contribution in a positive and realistic fashion.
There would be difficulties in trying to harness those organisations or in ensuring that they are represented on the partnership committees. The hon. Member for Walsall, North (Mr. Hodgson) pointed


to the great variety of voluntary organisations that exist, each with a specific contribution to make.
The trouble with the new clause is that it requires local authorities to co-opt representatives of non-statutory bodies on to any committee or working party concerned with the implementation of the Bill, even if the only non-statutory organisations in those areas may be such bodies as the Boy Scouts and the Red Cross. I am not decrying the value of those organisations—I was once a boy scout myself and have great respect for the scouts—but they may not be relevant to the particular committee or working party. In terms of the hon. Gentleman's amendment, they would have to have representatives sitting on the committee. We cannot formalise these things by legislation. But there is a real problem—it has been recognised by several hon. Members—concerning the relationships between voluntary and statutory bodies.
My hon. Friend the Member for Walsall, South (Mr. George) spoke about the need to build a bridge between local authorities and voluntary organisations. The hon. Member for Burton (Mr. Lawrence) referred to the need to try to reduce the conflict between officials and people. This is a real and difficult problem. There is undoubtedly an element of suspicion among voluntary organisations as to what statutory bodies are up to. Indeed, to some degree one finds in some cases that officials and local authority members have a suspicion and a dislike of the activities of voluntary organisations.
I believe that these bodies complement one another in a very real way, and I am hopeful that within the partnership arrangements, and in the arrangements that I hope will grow and develop in programme and other designated districts, it will be possible to recognise that complementary relationship, because they have a real part to play if they are working together.
It does not just mean consulting the voluntary organisation. It means their active participation in whatever is going on, and making the contribution they feel they can make, but not because it happens to fit into somebody else's plan. The contribution should be made because it is the one that the people concerned

feel to be relevant to the needs of their own area.
Although I cannot possibly accept the hon. Gentleman's new clause and cannot recommend the House to do so, I wish to underline to him quite sincerely that I have a great deal of sympathy with what he was saying. I do not think that the problem is an easy one. The hon. Gentleman recognises the immediate difficulty that we are facing—that the partnership authorities have to produce programmes by this summer. Although the partnership authorities are doing everything they can to consult, there is a timescale problem.
I am absolutely certain that as time goes on there will be a greater and greater measure of participation and involvement of voluntary organisations in the development of their own areas. I am also quite sure that the role of local councillors in maintaining a kind of link between voluntary and statutory bodies, as was pointed out, is absolutely crucial.
Local councillors are to a large degree volunteers, and therefore surely they, in their contact with their wards or the areas which they represent, have an important and crucial part to play in ensuring that the views of people at the grass roots are brought to bear upon those officials and other representatives who are making decisions at the top.
But essentially I am sure that the right relationship is one between the local authority and the voluntary organisations, rather than trying to involve the voluntary organisations in the partnership, which has the very specific purpose of bringing together the statutory bodies which need to co-operate and co-ordinate their activities more closely.

Mr. Finsberg: I hope that the House enjoyed the all too brief contribution of my hon. Friend the Member for Liverpool, Wavertree (Mr. Steen). He may only represent one-ninth of the city of Liverpool but he proves that quality is better than quantity. We certainly had a fascinating discourse from him. Occasionally I think that he gets slightly carried away and is perhaps trying to provide, via Hansard, two or three theses on the theory of voluntary bodies. I hope that one day he may actually find himself sitting at a desk, forced to put into operation some of the ideas that he has put to us both here and in Committee.

Mr. Steen: I should like that.

Mr. Finsberg: It would be a salutary experience not merely for him but for any officials who had to work for him.
My hon. Friend, in his speech, which certainly championed the non-statutory bodies, said that there was a need to involve those persons most closely concerned, whether they be—as I understood his speech—councillors, boy scouts or trade unionists.
It was fair that the hon. Member for Liverpool, Garston (Mr. Loyden), who did not hear the first part of that gem of a speech, should intervene and at a later stage point out the dangers of creating a non-statutory bureaucracy. He is perfectly right—it can happen. None the less, I do not see why, because this has happened in one of two areas, one should necessarily assume that it will happen everywhere else. I want to touch on this in a moment.
10.15 p.m.
The previous occupant of the Chair was trying to suggest that even Santa Claus might be consulted. He indicated that he was th only person left out of the long catalogue of names that is being considered. But I have a feeling that in his saintly guise as St. Nicholas he might be above those things. Therefore, I do not think that Santa Claus can be considered.
The hon. Member for Birmingham, Ladywood (Mr. Sever) spoke about the problem of a difference of opinion between the leader of the Conservative-controlled Birmingham Council and my hon. Friend. Indeed, he highlighted very fairly that there must always be a difference of view when one looks at these problems from the standpoint of one's own city. But where the hon. Gentleman did perhaps make an error was when he asked, "There are 30, 40 or 50 voluntary bodies. How is one to select?" He suggested that we would find a committee overburdened with representatives of every non-statutory body.
I should like to quote an example—which I know fairly well—which does work. That is the Camden Council of Social Service which was created at the time of the amalgamation of the three London boroughs of Hampstead, Holborn and St. Pancras. Every voluntary body within the three original boroughs agreed

to have this umbrella organisation. It is consulted frequently, with great success, by the borough council. It can work. It is not bureaucratised. I do not think anyone would feel that in any way the description applied by the hon. Member for Birmingham, Selly Oak (Mr. Litterick) could bear any resemblance. It was a nonsensical intervention which did the hon. Gentleman and the House no credit. I shall ignore the rest of what he said.
But this sort of umbrella organisation could provide a valuable opportunity for the Minister to draw these voluntary bodies into consultation. The hon. Member for Walsall, North (Mr. Hodgson) and my hon. Friend the Member for Burton (Mr. Lawrence) put a lot of stress upon the bi-partisan approach that in the end will achieve a great deal. I think the Minister will agree that with limited exceptions we have had a bi-partisan approach to this Bill. There are no party political advantages in trying to help the deprived. One ought not artificially to try to create them, as the hon. Member for Birmingham, Selly Oak did.
However, I shall leave his nonsense and continue for a moment to quote from the very good letter—which I am sure the Minister has seen—from the National Council of Social Service, to which my hon. Friend the Member for Wavertree by constraint of time was able to mention only a few selected extracts. This letter, which was dated 24th April, said that it had been sent to the Secretary of State and that certain proposals had been made to him in the memorandum that he received last week. The letter went on to say that there was a great danger that unless those living in our inner city areas are allowed to participate in solving their own problems, they will become yet further disillusioned. It goes on:
We need to act now or the opportunity afforded by the inner city programme will be lost".
The letter sets out a series of guidelines of the sort of people who ought to be involved. It includes trade unions, the local communities, the voluntary organisations and the business communities because, as the Minister said, if the inner urban areas project is to be a success, we have to bring in private enterprise.


Without its involvement the jobs will not be created.
Equally, therefore, we need to involve the local people who will themselves have the offer of jobs and who will have to see a certain amount of disturbance whilst properties are converted, with the noise and the dust that that involves. They are bound to feel that "they"—those in Whitehall and in their respective city halls—are implementing measures without actually involving them. I agree that there are local councillors to do this, as the hon. Member for Ladywood pointed out. However, having served, like the hon. Member for Ladywood, in local government for a very long time, I know that when a councillor goes back to his electors seeking re-election he still hears complaints that his electors are not being represented even by their elected councillor. Too often they feel that they are not consulted about decisions which count.
The new clause may be inelegantly worded, and I have no doubt that it is less expertly worded than the Minister's draftsman could manage. The Minister said that he did not want to bring into the statute the marvellous work of the voluntary bodies. Apparently he does not want to say anything in the Bill about them. He pointed out that they were fully recognised in Part IV of the White Paper. However, in many cases the White Paper has not been translated into the Bill.
I must remind the Minister that when the Secretry of State introduced the White

Division No. 192]
AYES
[10.23 p.m.


Brooke, Peter
Latham, Michael (Melton)
Shaw, Giles (Pudsey)


Brotherton, Michael
Lawrence, Ivan
Skeet, T. H. H.


Buchanan-Smith, Alick
Morris, Michael (Northampton S)
Steel, Rt Hon David


Cooke, Robert (Bristol W)
Neubert, Michael
Steen, Anthony (Wavertree)


Durant, Tony
Pattie, Geoffrey



Grist, Ian
Penhaligon, David
TELLERS FOR THE AYES:


Hooson, Emlyn
Ross, Stephen (Isle of Wight)
Mr. Robin Hodgson and


Howells, Geraint (Cardigan)
Sainsbury, Tim
Mr. Andrew Mackay.




NOES



Allaun, Frank
Coleman, Donald
Ewing, Harry (Stirling)


Armstrong, Ernest
Conlan, Bernard
Fernyhough, Rt Hon E.


Atkinson, Norman
Cowans, Harry
Fletcher, Ted (Darlington)


Barnett, Guy (Greenwich)
Crawshaw, Richard
Ford, Ben


Benn, Rt Hon Anthony Wedgwood
Crowther, Stan (Rotherham)
Forrester, John


Blenkinsop, Arthur
Cryer, Bob
Freeson, Rt Hon Reginald


Boardman, H.
Davies, Ifor (Gower)
George, Bruce


Booth, Rt Hon Albert
Davis, Clinton (Hackney C)
Golding, John


Bray, Dr Jeremy
Dormand, J. D.
Gourlay, Harry


Buchan, Norman
Douglas-Mann, Bruce
Grant, George (Morpeth)


Buchanan, Richard
Duffy, A. E. P.
Grant, John (Islington C)


Cant, R. B.
Dunnett, Jack
Hamilton, James (Bothwell)


Cartwright, John
Dewar, Donald
Harper, Joseph


Cocks, Rt Hon Michael (Bristol S)
Edge, Geoff
Harrison, Rt Hon Walter


Cohen, Stanley
Evans, John (Newton)
Hooley, Frank

Paper, he made specific reference to the need to involve commerce. However, it was only when the Minister moved an amendment tonight that we got commerce out of the White Paper and into the Bill. In the same way, the Bill should pay some heed to involving voluntary organisations. How that can be done, I readily admit that I do not know. The Minister said that he accepted that there was some force in the argument of my hon. Friend the Member for Wavertree, but I would have been much happier if he had gone on to say that because there was an aspect which was not covered in the proposed new clause, he suggested that it be withdrawn, in which case he would undertake in another place to move a new clause which recognised in the statute the position of the voluntary bodies and which gave them an opportunity to play their part in the proposed set-up.

I do not feel that the Minister has gone as far as he wanted to go. He certainly has not gone far enough to cover the point raised by my hon. Friend the Member for Wavertree. For that reason, I do not feel that I am in a position to offer any advice to my hon. Friend about whether to withdraw his clause. He will have heard the Minister. He will have heard the other arguments which appeared germane. He must make up his own mind about what to do.

Question put, That the clause be read a Second time:—

The House divided: Ayes 20, Noes 92.

Horam, John
Morris, Rt Hon Charles R.
Thomas, Ron (Bristol NW)


Hunter, Adam
Murray, Rt Hon Ronald King
Tinn, James


Jackson, Miss Margaret (Lincoln)
Newens, Stanley
Wainwright, Edwin (Dearne V)


Jones, Barry (East Flint)
Oakes, Gordon
Walker, Harold (Doncaster)


Lambie, David
Palmer, Arthur
Walker, Terry (Kingswood)


Lamond, James
Parry, Robert
Ward, Michael


Lestor, Miss Joan (Eton &amp; Slough)
Pavitt, Laurie
White, Frank R. (Bury)


Loyden, Eddie
Rodgers, George (Chorley)
Whitlock, William


Luard, Evan
Rowlands, Ted
Williams, Rt Hon Alan (Swansea W)


McCartney, Hugh
Sever, John
Woodall, Alec


McElhone, Frank
Shaw, Arnold (Ilford South)
Woof, Robert


MacKenzie, Rt Hon Gregor
Shore, Rt Hon Peter
Young, David (Bolton E)


McMillan, Tom (Glasgow C)
Spearing, Nigel



Marks, Kenneth
Spriggs, Leslie
TELLERS FOR THE NOES:


Marshall, Dr Edmund (Goole)
Stallard, A. W.
Mr. Ted Graham and


Maynard, Miss Joan
Summerskill, Hon Dr Shirley
Mr. Alf Bates.


Millan, Rt Hon Bruce
Taylor, Mrs Ann (Bolton W)



Miller, Dr M. S. (E Kilbride)
Taylor, R. (Croydon NW)

Question accordingly negatived.

New Clause No. 15

INDUSTRIAL DEVELOPMENT CERTIFICATES

'It is hereby declared that, notwithstanding any limiting provision in the Town and Country Planning Act 1971, no industrial development certificate shall be required in respect of the erection of any industrial building in any area of special social need included in any district designated as a "designated district" for the purposes of this Act.'.—[Mr. Geoffrey Finsberg.]

Brought up, and read the First time.

Mr. Finsberg: I beg to move, That the clause be read a Second time.
The new clause is designed to remove from the special areas referred to in the Bill the need to obtain IDCs. It is self-explanatory.
It is clear that there is a need under legislation for IDCs in the case of extension, as well as erection, of industrial buildings. I concede that the clause may not be sufficiently well drawn, but it indicates what I hope is the right line of approach.
As the Bill now contains references to commercial properties, there is also a case for the removal of office development permit requirements in the special designated areas. I admit that the Government have made several moves over the years to ease both IDC controls and office development permit controls, but I think that the Minister will agree that, whether it is justified or not, there is a psychological blockage in the minds of many undertakings which feel that it is not worth the bother of going through all the mechanism to try to get an IDC.
We know that the limits have been raised. I think that the Minister will confirm that the figure of refusals is down to as low as 6 per cent. But what he

and I do not know is how many people have decided that it is not worth the effort of discussion and filling in documents in order to see whether they will be among the 94 per cent. or the 6 per cent.
The Bill applies to areas in many of which there is high local unemployment. Many of our inner city problems are both caused by and the cause of unemployment. Therefore, I see no justification for retaining IDC control in those areas.
There has always been an argument put forward by the Department of Industry that because there are assisted areas and development areas, other places should not be put in such a favourable position as regards IDCs as the assisted or development areas. I do not accept that argument, but I understand why it is made. However, when we are dealing with this Bill, which does not differentiate between different parts of the country but says that there are inherent problems in those areas that are designated, there is a case for saying that in those areas, if in no others, IDC control should go.
I remind the Minister of the problems of the inner areas of London, which are typical. The figures are the same sort of figures as one would find for the inner areas of Merseyside or Manchester. There is no difference; they are merely different spots on the map.
Between 1961 and 1976 employment in London's manufacturing industries fell by 600,000, which represented a loss of 42 per cent., compared with a loss of 12 per cent. in England and Wales as a whole. The rest of the South-East region had a rise of 14 per cent. In 1961 London's share of United Kingdom manufacturing employment was 15 per cent. By 1976 it was down to 11 per cent.

Mr. Hooley: What percentage of total employment in London is represented by manufacturing anyway?

Mr. Finsberg: The figure was fairly substantial at one stage, but it has been gradually going down percentage-wise. I cannot give a figure because I do not have it at hand. I do recall that manufacturing interests in London, which provided a substantial volume of employment, have steadily gone down, as a percentage of the total employment prospects in the capital. I could probably put down a Question on this matter, and get the answer, which the hon. Member could read in Hansard when it is printed.
In using these figures as an illustration I have shown that there is a clear need to bring manufacturing and service industry and commerce back into the inner areas. This could put whole parts of Cornish Street, Sheffield, for example, back into business, as this has been disappearing rapidly as a source of jobs.
There have been arguments over the years that IDCs are necessary to preserve the special status that is part of the regional policy. This Bill deliberately sets out to override these limitations in the inner areas. Because it has done so, it is incomplete in not providing that in these inner areas there should be no need for IDC control.
I do not believe that there is any mileage to be gained from making long speeches on this simple matter, so I shall be brief. There is a case for making a change of this limited nature. It would cost nothing—indeed it might release one more civil servant. When we were given the figures in the last debate, the number of civil servants operating IDC control had gone down to 22. Perhaps this change would enable it to go down to 21. Perhaps civil servants could be redeployed in helping to organise the participation of voluntary bodies in the partnership committees. It would not involve any extra public expenditure and it would not be a breach of the principles of regional policy, any more than the Bill is a breach of those principles.

Mr. Hooley: I want to make a few quick comments. I regard IDC control as a very important part of the apparatus of economic control in this country, and I believe that it would be a serious error to abandon it, even in a small area.
The hon. Member for Hampstead (Mr. Finsberg) has already said that in 94 per cent of cases, the control does not act adversely anyway. We must look at the position not only as it is at present, but as it will be in the future. When we get out of this recession and move into economic expansion, there may be a good case for using IDC control to allow those parts of the country that are expanding more slowly to take advantage of the economic upturn. IDCs could be very important for this purpose, and it would be extremely difficult to reimpose them once they had been abandoned.
IDC control is an important technique for economic direction, and it would be a serious mistake to abandon it simply because of the current—and admittedly difficult—position of the inner urban areas.

Mr. Stephen Ross: I shall speak only for a few moments. I have a confession to make in that I have attended a recent meeting of the GLC, and it was the unanimous opinion on all sides of that body that IDCs and ODPs should be removed. The reason that GLC members wanted this—Labour members, just as much as Conservatives—was that they saw it as an extra piece of unnecessary bureaucracy. Apparently many people thought that once they got an IDC they had actually got planning permission to go ahead and develop. But having to go through two processes took so much time that some people who were interested originally, moved elsewhere. At that meeting, all sides asked specifically—and there were Labour Members present when I was there and they seemed to go along with this proposition—that the IDCs should be removed.
I still remain to be convinced about office development permits, but in this case, as it is limited purely to the areas of special social need, there is a lot to be said for the new clause.

10.45 p.m.

Mr. Tim Sainsbury: As this is the first time that I have intervened on this Bill, perhaps I ought to start by declaring an interest as a director and substantial shareholder of a commercial company which could potentially benefit, and as a director and shareholder of industrial companies which could potentially benefit, under the provisions of the Bill if it is enacted.
I agree with the hon. Member for Sheffield, Heeley (Mr. Hooley) that in many of the areas of special social need, industrial employment is now only a minority of total employment. But I suggest that the hon. Member would agree with me, and, indeed, that there would be general agreement in the House, that industrial employment in any area of special social need is very valuable, not just because it adds to the total volume of employment in that area but because it provides in certain particular problem areas the variety of employment and the variety of job opportunities which I think we all believe to be necessary.
There have been substantial criticisms of the employment opportunities available in areas which become dominated by commercial activities. There have been criticisms in the London area, for example, of the problems that could possibly flow from excessive concentration on tourist-related activities. I do not entirely go along with these criticisms, but I could feel stronger in resisting them if I believed that there would remain in those areas a volume and variety of industrial employment that would provide sufficient variety of employment opportunities, particularly to the school leaver, to make him or her feel that there was no reason for leaving that area.
When we consider whether we should have IDCs in these areas, one of the first factors that we should take into account is the psychological effect that the requirement to apply for an IDC has upon the potential industrial developer. The biggest deterrent to investment, in any sphere but particularly new industrial investment, is uncertainty. Too often in this House we tend to assume that industrial investment takes place against a background of determined factors which allow for certain decisions to be taken. Without wishing to criticise civil servants, I must say that we behave, in a way, as though we were civil servants dealing with a predictable set of facts and could determine exactly what would happen, so that if we took decision A there would be a certain result, and if we took decision B there would be another result.
New industrial investment is not of that character. There is always an element of uncertainty. There is usually quite a lot of uncertainty. There is uncertainty about not just the financial

return but also the timing of the matter. Timing can be crucial as regards how quickly one can bring a project to beneficial development. Indeed, in some cases, unless one can bring one's product line on stream fairly quickly, one will miss the market. Someone else will have got in, either in this country or, even worse, in another country, and got his product established in the market place, and one will have a much more difficult job in getting one's rival product established and in competition with the market leader. There is that significant, important psychological factor.
I am sure that when the Minister replies he will tell us that IDC applications in the areas of which we are speaking are not refused. He will probably produce figures to show how easy it is and how his Department, the Department of the Environment and the local authorities are all trying to help. However, all that is no good. It is no good, to use the analogy of the Grand National, to be told that when we get to Beecher's there will be some people to lift us over. We shall still be rather nervous about the idea of going across. In any event, we cannot be sure that they will be there to lift us until we get there and they have lifted us over.
Additional uncertainty is introduced into the mind of the potential investor as long as he is required to cross the additional barrier of the acquisition of an industrial development certificate. Presumably the Bill is before the House because we want to help the areas with which it deals. If we want to help these areas with employment, surely we want to remove any unnecessary obstacle to employment.
I go along with those who say that we must try to have a balanced regional policy. However, I cannot see that allowing freer access and removing obstacles to industrial development in areas of special social need will damage regional policy. The effect, if any, would be so marginal. What is regional policy about but trying to help areas of special social need? Why prejudice one area of special social need at the expense of another such area?
I do not accept that it is sufficient for the potential industrial developer to be reassured by the Minister, by his civil


servants, by the local authority or by the Department of the Environment that he will get his industrial development certificate and that there is no difficulty. Developers will ask "If there is no difficulty, why have I to go through this rigmarole? There must be some potential difficulty. If there was no possibility of being refused, why am I being required to apply in the first place?" Some of us would sympathise with that view. Why is all the bureaucratic time and all the time of the applicant staff to be taken up in completing all the forms and answering the questions if the developer is bound to get an affirmative answer?
The industrial developer is bound to have an additional uncertainty if he has to apply for an IDC. Further, the inevitable consequence of having to make application for an IDC is delay. There are enough delays inherent in our industrial development process, especially delays arising from the somewhat imperfect operation—that is being modest about it—of our development control system. That is a matter to which we may return on a later amendment. If a developer has to obtain an IDC before applying for planning permission, there is additional delay.
As I have said, there are projects—sometimes extremely valuable ones in terms of export potential, or import replacement—which for their success depend upon the speed at which they can be brought into operation. If in addition to the uncertainty there is delay, there must be a deterrent factor to the potential industrial developer.
A third inevitable consequence of the need to apply for an IDC is that there is a cost element. I am sure that the Under-Secretary of State will acknowledge that that is so. My hon. Friend the Member for Hampstead (Mr. Finsberg) reminded us that not many people are now involved in the mechanism of scrutinising and approving or rejecting applications for IDCs. I suggest to my hon. Friend that the number to which he was referring were those directly employed by the Department. I suspect that many others are involved in consultation. My limited experience as a part-time unestablished civil servant is that the paper tends to go

round and round. It appears on various desks with little flags asking for quick replies. All sorts of people are asked to give their replies to questions that perhaps do not provide for their answers. Departments are asked to comment and to give their views. So, although there may be only 22 people employed directly, the messengers employed by the service could run into quite a number.
That is not half the problem. Much more serious is the amount of time that will be taken up of the skilled, experienced, senior staff of the applicant trying to answer questions which do not allow for any certain answers. For example, how many people of what sex and what age—not precisely what age, but under and over 18—will the applicant be employing in one, two, three, four or five years? The average industrial employer wishes that he knew the answer. The answer is entirely dependent upon the success of his operation, which may in any case be dependent on the speed with which his application for an IDC can be processed. So there he sits scratching his head and wondering how many people he should say he will be employing in, say, three years when all he wants to do is to get on with the wretched project.
It seems absurd that, if we are trying to provide real help to areas of special social need, we should continue to require industrial developers to go through the rigmarole of applying for industrial development certificates. I suggest that as long as an industrial developer knows that is a hurdle that he has not got to cross in some parts of the kingdom, but has to cross in other parts of the kingdom—whether in London or the Greater Birmingham area—it will be a deterrent. It is not sufficient for the Minister to say that he will be helped or that he is likely to get an affirmative answer. The industrial developer, seeing the uncertainty, the delay, the costs of the application and the requirement to answer questions, which I suggest do not permit of certain answers, will inevitably be deterred and made that much less likely either to go ahead with the project or to put it in that area of special social need.
I hope that the new clause will commend itself to the Government. It would be even better if they told us that no longer would the new clause be required


because the whole unnecessary bureaucratic delaying mechanism of industrial development certificates was to be scrapped altogether. We could then go back to a really effective regional policy, get the economy moving again and provide proper incentive backing so that no mobile industry would be looking for sites. All these advance factories and these other proposals in the Bill would then be worth while.
The provision of this infrastructure, buildings and so on will be effective in terms of job opportunity only if employers seek to make use of the facilities and provide the jobs. I suggest that this hurdle of industrial development certificates could sensibly be taken away for the benefit of the areas about which we are talking.

Mr. Hodgson: My hon. Friend the Member for Hove (Mr. Sainsbury) used the word "uncertainty" to describe the industrial development certificate policy. I prefer to use the word "threat". It is a threat about the future, a threat of uncertainty. It is a sword of Damocles hanging over many successful firms which, if they make a go of things, fear that they may not be able to find room to expand and, as a result, feel that the future of their operations will be cramped.
Nowhere has this policy had more disastrous effects than in the urban West Midlands and, in particular, in the areas which will be covered by the proposals in the Bill. The centre of Birmingham, Wolverhampton and parts of Walsall have been badly affected, because successful firms have been forced by the operation of this policy over many years to leave the area. They have been forced to go, first, to South Wales and to development areas and, later, to new towns. That is all very well, but the result is that the successful firms have gone and the conurbation—in particular, the centre of Birmingham—has been left with the mature firms which are not expanding fast and with the firms which have no immediate prospects of increasing employment and job opportunities. Most importantly, we are left with an increasingly narrow industrial base.
11 p.m.
The West Midlands Economic Planning Report shows how dependent the West Midlands is on metal bashing, as it is known in the trade—on engineering in

steel in one form or another. We have missed out on many of the new industries, on plastics and electronics and many others which will be important in Britain in the last quarter of the twentieth century. Therefore, if the Minister is not prepared to give this assurance, he is knocking away one leg of the policy on which many of the proposals in the Bill are based.
I would go further than that, and suggest that the IDC policy has failed so far to comprehend the real nature of industry and the way in which firms are linked with one another. Nowhere is that more important than in small firms, on whose role the Minister and Government have placed, and continue to place, great stress in the creation of job opportunities and employment prospects generally and in rebuilding the fabric of the economy of the inner urban areas. Small firms are particularly badly affected by the operation of the IDC policy because they are linked in a series of intricately woven relationships.

Mr. Edge: No small firm needs an IDC at all. If the hon. Gentleman looks at the small firms in Birmingham, to scarcely one is big enough to require which he is referring, he will find that an industrial development certificate.

Mr. Hodgson: Taking the Birmingham example to which the hon. Gentleman refers, the classic case is where we have a steel stockholder who supplies a series of engineering firms which drill the steel, shape it, fabricate it, or send it somewhere else to be painted and finished. That is then incorporated in a much larger product and sold somewhere else. These firms are all linked in a chain, and somewhere along that chain, one may come to a firm sufficiently large to be constrained by the IDC policy. If one removes one link from that chain, one affects not merely that link but the whole chain. One cannot, therefore say that small firms will not be affected. They may not be immediately, but of course they will be affected if they grow and particularly if their suppliers or customers are affected.
My most important point is, therefore, that we have to consider the effect of the overall linkage of firms and their relationship one to another. If we are to enable the rebuilding of the economies of the city centres and to be able to get employment prospects and the creation of


wealth which both sides of the House agree is vital, we have to make sure, on the one hand that there can be no threat to the small business man who may be successful and then find that his growth is constrained and, on the other, that there is no threat to the big firm which wishes to expand but cannot expand. That firm will remove its entire operation, thus affecting its many suppliers and customers.
I hope that in his reply the Minister will consider carefully the importance not of what he will say—that no IDCs have been refused in Birmingham in the last 12 months, which as my hon. Friend the Member for Hove said, is not the point—but of the uncertainty. Most of the modern fast-growing industries have not, as a result of IDC policy, been located in the West Midlands. If the Minister is serious about making a go of inner urban area policy, he will have to do something to make sure that firms are able to prosper in those areas. To remove the IDC policy is just a small step in that direction.

Mr. Edge: I had not intended to intervene on this new clause but I am very concerned about many of the fallacies put forward about the effects of the IDCs.
I believe there should be a complete review of our regional policy, but to suggest that inability to obtain IDC certificates has in any way produced the economic problems of the inner cities seems to me unsupported by the evidence.
The reason for the situation is simple. Most of the firms in the inner city are small—too small to require an IDC certificate. Although it is true that there is a linkage with larger firms, I would point out that most of the firms in the West Midlands with which the small firms are linked are in the area anyway and are unlikely to require an IDC certificate. If they require such a certificate to extend existing premises and carry out an existing operation, in most cases they are quite likely to get it.
If the hon. Member for Walsall, North (Mr. Hodgson) examines the statistics, he will find that there are hardly any examples of a large firm being forced to move from a conurbation because it could not obtain an IDC. If there is a criticism of the IDC system, it is that it prevents entirely new industries moving into cities such as Birmingham.

Mr. Eyre: The hon. Gentleman said that there was no record of any large company moving from a conurbation because it could not obtain a certificate. Has he taken into account the case of Typhoo Tea at Bordesley which recently, as a result of an IDC decision made years ago, left Birmingham resulting in the loss of 600 jobs in the inner area of Birmingham?

Mr. Edge: I take the point about Typhoo Tea, but we are talking about linked firms, and there are not many engineering firms linked with Typhoo Tea.
The argument I am developing is simply that most of the small firms in the inner cities are the firms which characteristically occupy the inner cities and do not require IDCs. They are likely to be affected only if the firms to which they are linked require an IDC.
The major problem is that most of the firms that remain in the inner cities are firms which are not growing. If they were growing, they would seek cheaper land outside the inner city area. They are either firms which are not growing and which are the failures, or firms in industries which are declining in any case. Therefore, no amount of money pumped into those industries will bring about any new growth.
The major factor in the decline of the inner cities has not been IDC policy but the policies of successive local authorities which have demolished large areas of cheap industrial premises, some of them sub-standard, which were available at very low rents.
To give an example, when the Birmingham City Council redeveloped the jewellery quarter in the city, they replaced premises which were available at less than £1 a week rental with a square footage which even in 1970 required £3,000 a week in rental. It is not surprising that many small firms disappeared, but to argue that we must not apply the IDC policies to the inner city areas as an aid to bringing about regeneration seems to me to miss the target completely. What we need to do far more is to argue that this Bill ensures a supply of cheap industrial premises and the cash available for small firms to expand—because shortage of capital is the major reason for small firms declining and going out of


business—rather than to concentrate on IDC policy itself. I personally believe that IDC policy needs changing, but to raise that issue in this debate is irrelevant.

Mr. Durant: I always understood that IDCs existed to dissuade industry from entering places where it was felt not advisable for it to be and to try to spread industry to other parts of the country. That was its original concept. Here we are dealing with a Bill that is trying to attract people back. Therefore, I cannot see that there is anything wrong in this particular case with doing away with IDCs.
The hon. Member for Aldridge-Brownhills (Mr. Edge) said that the main problem is new industries. This is surely one of the things that we are talking about—trying to get new industries to come back into city centres. That is why I believe that the IDC is a deterrent. It is another hurdle.
The hon. Gentleman also said that the problem was one of planning blight, and I agree with him. The planners, indeed, have been the cause of half our trouble, but the IDC is all part of the trouble and we cannot knock one off without the other.
We have been knocking down vast areas well ahead of our resources and the desires of the people concerned. The planners have been moving ruthlessly into areas and leaving them completely devoid of anything.
This is a simple step which will at least remove another hurdle in the way of the development industry within the inner city areas, which is what we all desire to see. I accept that small businesses are not necessarily affected and that in some places we want the big firms to return. There is an inclination at the moment to go out into new pastures and to new comfortable sites because they are more attractive in some ways. The problem is that anyone taking an old site in an inner city area can find that he is landed with a lot of problems.
In the context of the Bill, it should be quite in line with our policy to do away with IDCs, and this simple step is one that we should all support.

Mr. Steen: The Minister is no doubt concerned about the inner city areas and

how they are to be rejuvenated. Although there may be sighs from Government Members at the thought of having to listen to another long speech from me. I hope that the House will recognise that this subject concerns the principal areas of population in this country and it concerns the most deprived people in the cities. It would be quite wrong of the Government to try to steamroller the Bill through and rush us out of the House in order to get home, because we are debating one of the most serious matters of our time—the revival of our inner city areas and the improvement of the quality of life in them.
On the Conservative Benches we are as concerned as we can be to try to get to the bottom of this problem and to improve the Bill if we can, because it is the only Bill that we are likely to have in this Parliament to do something about the inner cities and the urban areas.
I hope that my approach is the same as the Government's, and the question is: how are the Government to rejuvenate the inner cities? How are we to breathe back fresh life into the core areas rather than the inner city, because the term "inner city" is a wider one. It is the city centres of the major urban areas and conurbations with which we are concerned here.
The purpose of the clause is to help this process by lifting the IDCs. That is the principle behind it. We on the Conservative Benches believe that by lifting the IDCs a new incentive will be given to industry to return.
The Government's attitude was rather curiously expressed. I hope it was not a reflection of the total Government commitment to this subject, but the right hon. Member for Swansea, West (Mr. Williams), who is a Minister of State, Department of Industry, at a meeting I attended with Merseyside trade unionists, chamber of commerce officials and other officials, and Members of Parliament, in the Department of Industry recently, took some exception to my remark that the Government should discriminate positively towards the inner cities by discouraging new industrial buildings on the greenfield sites on the edges of the cities. He was quite frank in his response, saying that the Government cannot dictate to industry where it should go.
That is a curious view for a Minister of this Government to take, because the one thing that the Government like to do is to dictate where people should go. I should have thought that the basic requirement of the revival of the inner city is dictating to new industry where it shall go. Unless the Government are prepared to dictate that industry must fill up the inner city area sites first, they will never see the rejuvenation of the inner city. In fact, I believe that the clause strikes at the root of the whole Bill.
If one of the purposes of the Bill is to bring back new life to the inner city, and if there is an obstruction in the shape of IDCs, preventing that new life from coming back into the cities, the Government should welcome the new clause. It is no good the Government saying that they do not like the words. Unless they can explain what incentives they will offer to industry to come back to the city, they will find that this Bill is worth no more than the paper it is written on. There is nothing in the Bill, as drafted, to attract industry back from the edges of the cities to the core areas. Let us test the Government's seriousness whether they think the Bill is worth more than the paper it is written on by asking just how they envisage industry returning to the inner core areas.
11.15 p.m.
As things stand, in the major conurbations of this country the land encircling the city—the greenfield sites—is always cheaper than the derelict or vacant sites in the inner areas. This means that new industry will inevitably be attracted to those greenfield sites rather than coming into the inner area. The simple reason is that not only is it cheaper but infrastructure is easier. By laying in one's drains, sewers and services on the outer city one can get a far better deal than if one comes into the inner area and does so on land which has already been used.
This means that business will continue to go on and on moving outwards from the centre, building on greenfield sites and applying for Government infrastructure grants—which are available—rather than being invited first to fill up the space which is at present unused in the inner city areas.
The purpose of the new clause, as I understand it, is positively to discriminate

in favour of the city centre, and to bring back new life to the inner area.
Unless I have got it wrong, that is what we have been debating for the last six or seven hours and that is what the Standing Committee was all about.
If the Government are to tolerate an obstruction and blockage which is preventing the very things which they say the Bill is all about, then one must question the intergrity, motives and ideology of the Government with regard to this Bill. The reason positive discrimination is necessary is that industry has been progressively driven out of the city centres by a combination of factors, the principal and most important of which is the view that we must demolish much of the old city and rebuild. The only snag is that the demolition was not accompanied by rebuilding.
Let us take, for example, the inner Birmingham area. I am told that 6,000 small businesses were destroyed by the bulldozer. Few ever surfaced again, because by pulling them down, and destroying their goodwill and location, there was nowhere for those firms to start up again. Therefore 6,000 small businesses in inner Birmingham were destroyed an with them all the jobs. The demolition of inner Liverpool has followed a similar pattern.
The Government seem to recognise this in their own White Paper "Policy For The Inner Cities". Paragraph 74 states:
In the big cities, the rapid rate of decline in population and jobs, and the ways in which they have got out of step, have compounded the difficulties. Between 1966 and 1976, Glasgow lost 205,000 people (21 per cent.), Liverpool lost 150,000 (22 per cent.), Manchester 110,000 (18 per cent.), Inner London 500,000 (16 per cent.), Birmingham 85,000 (8 per cent.).
In the cities of Newcastle and Nottingham, 12 per cent. and 8 per cent. of the population moved outwards. They did not move outwards becaus they chose suddenly to move. It was part of a grand design by most of the city councils, which we now recognise was totally misplaced, to destroy the old landmarks, old warehouses, old factories and old houses on the basis that old was bad. The idea was to demolish what was old and move the people out, and this is a process which has continued ever since. In fact, the exodus from Liverpool at the moment is at the rate of 25,000 a year. It is continuing, and it is continuing only because the bulldozer is continuing to demolish.
So long as the land is being cleared and so long as people have to live somewhere and work somewhere, they will continue to move outwards, and factories will go on being built on greenfield sites outside our cities, unless the Government take positive discriminatory action to make it attractive to go into the inner city areas. Presumably, part of this Bill is aimed to do that, and presumably the Minister will say that this new clause will not help. However, the Opposition say that it is one factor which may help and that, if the Bill is really to have the teeth that we wish it to have, it must try every means possible to encourage business back into our inner city areas.
We know how the rot started in Liverpool. Land was being cleared at a rate faster than people had the resources to replace what had been cleared, and this was the pattern in many other major cities. This was at a time before the economic recession set in. The accelerated slum clearance programme introduced, I believe, at the suggestion of the National Building Agency in 1965, aimed at demolishing 33,000 housing units by 1974, followed by a further 16,000 dwellings declared unfit in Liverpool a year later. To date, 60,000 dwellings have been destroyed. That means 60,000 units in which people were living and 60,000 familes being displaced.
The moral is clear. The city council allowed the housing department to pursue its own self-imposed operational objectives without recognising the consequent problems which were even then becoming apparent—for example, the visual and economic blight, the social disruption, and the loss of local facilities for those who remain in the inner area. What is especially curious is that the people who are left in the inner cities—that is, the city centres—whether it be Birmingham, Liverpool or Newcastle, are those who could not get out. They are the unskilled, the unemployed and the pensioners. Those are the most disadvantaged communities in our society which this Bill hopes to help.
But the most serious criticism that we make of this Government is that, as the Bill stands, we all know if we are honest with ourselves, it will not help any of these people. We are misleading them if we suggest that the Government's urban

programme through this Bill will be of any use to anyone.

Mr. Cryer: The last thing that I want to do is prolong the hon. Gentleman's speech, but will he say how his comments relate to the clause, which proposes to remove IDC control from the partnership areas? How would it affect Liverpool, for example, and Newcastle, because, of course, there is no IDC control in those areas?

Mr. Steen: I am seeking to explain, and illustrating it by reference to Liverpool and Newcastle, that any area, whether or not it has IDC control, will need encouragement to bring industry back to the inner city. We need not concentrate upon any specific town. We can deal with the general principle, which is that the only way we can bring industry back is by a positively discriminatory programme.
I point out to the Minister—and I do so by way of example only—that the inner area studies which the Department of the Environment started to conduct in 1972 and which placed teams of professional surveyors and researchers all over the country, revealed that in my own city 11 per cent. of the land in the project area was vacant and that three-quarters of it was owned by the city council. A third of the vacant land was allocated for highways, none of which was likely to be implemented. Half of the highway land had already been vacant for more than five years, while more than one-fifth of the land zoned for housing would be developed in two years. So an immense amount of land remains to be used.

Mr. Cryer: I am trying to understand how the new clause which the hon. Gentleman supports relates to his present argument, since there is no IDC control on the land he is talking about and the new clause proposes the removal of IDC control.

Mr. Steen: As the argument develops, the hon. Gentleman will see—

Mr. Deputy Speaker (Mr. Oscar Murton): Order. I must intervene. The Chair has been wondering the same thing. The hon. Gentleman must come to the point. We are discussing a new clause dealing with industrial development certificates.

Mr. Steen: With respect to the Minister and the Chair, the point that I am making is that there is an obstruction. The Minister has seized on two cities—Liverpool and Newcastle—but I shall not emphasise them if he does not wish me to. But the urban problem of this country will not be solved until the new clause becomes law and the IDCs do not discriminate against the return of industry to the inner areas. With the clause there will be none of the prohibition which at the moment is a disincentive.
One of the biggest problems of the modern industrialist is that the growth industries prefer to go where the skilled labour is—not the inner cities but the new towns and the greenfield sites. The clause would help the skilled men to return to the inner cities. That means giving positive incentives.
At the moment, the emphasis is on the large new towns around the major cities. We cannot change the emphasis while the Government insist on cuts in commuter transport, which make it more difficult for those on the edges to come into the inner city. In my area, the number of trains from the commuter belt is to be cut from 76 to six a day. That will not help to rejuvenate the inner area.

Mr. Deputy Speaker: Perhaps I might ask the hon. Gentleman how it will help the discussion of the new clause, which relates to industrial development certificates.

Mr. Steen: One must outline the problems of these people and ask how to get them back into the inner areas where the IDCs operate. I will not labour this point much further, because the House has the message, but it is very important. Unless we can reverse this drift, there will be no redevelopment of the inner areas.
11.30 p.m.
The major problem in most of the urban inner areas is the amount of vacant and derelict land there. In many cities as much as 50 per cent. of the vacant land is in the ownership of the local authority—in my own city it is about 60 per cent.—and a further 15 per cent. to 20 per cent. is in the hands of nationalised industries. The Minister will remember the Bill which I introduced the other week

under the Ten Minutes Rule, by which I sought to make it compulsory for local authorities either to develop their land by themselves and brine it into constructtive use within, say two years, or to put it on the open market by way of public auction so that it could be used by somebody.
One of the problems of getting factories back to the inner areas is the artificial land value that it attracted to vacant sites that are owned by the local authrority. Unless we lift the IDCs—

Mr. Deputy Speaker: Order. Is the hon. Member going to mention IDCs? I thought that he was just about to do so. I hope that he is.

Mr. Steen: Yes, Mr. Deputy Speaker. I was coming to that.

Mr. Deputy Speaker: I hope so.

Mr. Steen: Unless vacant land that is being hoarded by public authorities can be brought into productive use those industries that would have come to the inner areas will be prevented from doing so by the operation of IDCs. The Minister will understand that this strikes at the root of the Bill. Unless we can encourage businesses to come to these vacant and derelict spaces of our inner cities, the Bill will be a nonsense. I hope that the Minister will address his mind to how the Bill will help to get factories and skilled men to come from the outer to the inner areas. I hope, too, that the hon. Gentleman will tell us why he feels that the clause will not help that process.

Mr. Cryer: The clause is unacceptable to the Government, as many Conservative Members suspected. It would completely remove many inner areas from the scope of industrial development certificate control.
We regard IDC control as an essential part of regional policy. It is concerned with identifying projects which have a genuine choice of location and encouraging them to go to the assisted areas, particularly to the special development areas and development areas. The control also restricts speculative industrial building to developments which do not harm the interests of the assisted areas.
I was staggered to listen for 21 minutes to a representative from Liverpool where


there is no IDC control. The basis and reason for IDCs is to try to encourage mobile projects to come to the assisted areas, and every word that the hon. Member for Liverpool, Wavertree (Mr. Steen) uttered was against the interests of the part of the country that he represents. I intervened on two occasions during his speech specifically because he mentioned areas in his part of the country and tried to relate them to a clause which is trying to do something which is not connected directly with what he was saying and which, if it were accepted, would harm the position of the part of the country which he represents.
My right hon. Friend the Secretary of State for the Environment announced on 8th November that the partnership areas of inner London and inner Birmingham would take precedence before their new and expanding towns but after the assisted areas in respect of applications for IDCs coming forward from the South-East and West Midlands. Furthermore, the Department of Industry is now prepared to grant some IDCs for speculative developments in these partnership areas. Already under this new policy IDCs have been granted for over 1 million sq. ft. in the London partnerships and for over 300,000 sq. ft. in the Birmingham partnership.
We cannot relax the control further without harming the interests of the assisted areas whose needs must continue to have priority over the non-assisted areas. Moreover, a relaxation of the control outside the partnership areas, to other designated districts, would be against the interests of the partnerships.
I assure the House that the IDC system will continue to be operated flexibly with due regard to the circumstances of individual firms and of the areas concerned.
The hon. Member for Hampstead (Mr. Finsberg) and other hon. Members mentioned the possibility of a psychological barrier because of having to make an application. We have no evidence whatsoever that substantial numbers of business men are deterred from applying for IDCs. They certainly should not be. I want to make it clear that my Department and my regional offices are willing to give advice to business men in the light of individual circumstances. Cases are dealt with as rapidly as possible and in

the vast majority of cases the applicant knows where he stands almost at once.
As for the question of having to apply for an IDC before applying for planning permission—as one hon. Member suggested—I can go as far as to suggest to applicants that they should contact their local authority in parallel to applying for an IDC in order to avoid delay as much as possible. Department of Industry officials are well aware of the need to avoid undue delay and bureaucracy. IDCs are for reasonably substantial ventures in any case, because of the exemption limits which this Government has recently extended, but if a move is being made, if a project is genuinely mobile, it must be very carefully undertaken, and an IDC application is not an undue additional requirement on a move that is being properly planned.
IDCs are an important method of identifying mobile projects. If the Department of Industry did not have them we would have to employ civil servants to comb through newspapers or go round asking industries whether they intended to move, and if they did would they consider moving to the assisted areas, or we would have to run extensive advertising campaigns of a similar character. The clause proposes to exclude IDC control. Clause 4(4) refers to a designated district. An area "of special social need" is not an area defined in the Bill. The designated district would include considerably larger areas than the areas of special social need. This would bring enormous pressures for exemptions from other areas. They would seek designation, and this pressure would result in an erosion of non-assisted areas.
Within the areas local authorities with exemption from IDC control would be able to attract mobile projects to areas that were not in fact the inner city areas about which we are talking. For example, in Bradford the designated district covers the whole of the Bradford local authority area, which includes places such as Guiseley, Ilkley and Baildon. Ilkley, which is a residential area, but which has an industrial sector, is about 12 miles from the inner urban area of Bradford, which is the problem area about which we are all talking tonight.
The exemption would cover the whole area and it would be conceivable that a local authority would use its powers of


exemption in order to attract industry to a place that it chose, and that might not be the area that we all wanted to improve. In order to retain an element of fairness it is essential to retain a national pattern for mobile projects. In this sense IDCs are necessary, including the designated areas.
I well understand that there is more pressure for this sort of thing in a recession. My hon. Friend the Member for Sheffield, Heeley (Mr. Hooley) was quite right to point out that in a time of expansion IDCs are under much less pressure; people accept the situation far more readily. I understand quite well that hon. Members such as the hon. Member for Hampstead, from London, and the hon. Member for Isle of Wight (Mr. Ross), have been at meetings, which have included London Labour Members who are putting forward the view that controls should be removed. It is because of the recession. Jobs are important in every area of the country, but the traditional assisted areas are still the worst off—difficult though the position is in some parts of London, Birmingham and the West Midlands. We must pursue a regional pol icy.

Mr. Geoffrey Finsberg: The Minister says that he dos not think that there will be problems and that if he did not have

Division No. 193]
AYES
[11.42 p.m.


Bain, Mrs Margaret
Ross, Stephen (Isle of Wight)
TELLERS FOR THE AYES:


Bottomley, Peter
Steel, Rt Hon David
Mr. Robin Hodgson and


Brooke, Peter
Steen, Anthony (Wavertree)
Mr. Tony Durant.


Penhaligon, David
Taylor, R. (Croydon NW)



Rhodes, James R.






NOES


Allaun, Frank
George, Bruce
Newens, Stanley


Armstrong, Ernest
Golding, John
Palmer, Arthur


Barnett, Guy (Greenwich)
Grant, George (Morpeth)
Parry, Robert


Bates, Alt
Grant, John (Islington C)
Rowlands, Ted


Benn, Rt Hon Anthony Wedgwood
Hamilton, James (Bothwell)
Sever, John


Blenkinsop, Arthur
Harper, Joseph
Shore, Rt Hon Peter


Bray, Dr Jeremy
Harrison, Rt Hon Walter
Snape, Peter


Cant, R. B.
Hooley, Frank
Spearing, Nigel


Cocks, Rt Hon Michael (Bristol S)
Horam, John
Spriggs, Leslie


Coleman, Donald
Jackson, Miss Margaret (Lincoln)
Stallard, A. W.


Cowans, Harry
Jones, Barry (East Flint)
Summerskill, Hon Dr Shirley


Crawshaw, Richard
Lambie, David
Taylor, Mrs Ann (Bolton W)


Crowther, Stan (Rotherham)
Lamond, James
Thomas, Ron (Bristol NW)


Cryer, Bob
Loyden, Eddie
Walker, Harold (Doncaster)


Davis, Clinton (Hackney C)
Luard, Evan

Ward, Michael


Dormand, J. D.
McCartney, Hugh
White, Frank R. (Bury)


Douglas-Mann, Bruce
McElhone, Frank
Woof, Robert


Duffy, A. E. P.
McMillan, Tom (Glasgow C)



Evans, John (Newton)
Marks, Kenneth
TELLERS FOR THE NOES:


Ewing, Harry (Stirling)
Maynard, Miss Joan
Mr. James Tinn and



Fernyhough, Rt Hon E.
Millan, Rt Hon Bruce
Mr Ted Graham.


Freeson, Rt Hon Reginald
Murray, Rt Hon Ronald King

Question accordingly negatived.

these powers, his officials would have to comb newspapers and so on. That means that they keep fairly accurate records. Would it be possible for them to keep a record in the 12 months after the Bill is enacted to find out how many applications are refused in the areas covered by the Bill?

Mr. Cryer: That is a useful suggestion. We do keep records and we shall take an interest in finding out the pattern of refusal, though it is slim. We want to be encouraging, but we wish to retain control. For example, 692 IDCs were granted and only 17 refused in the GLC area between 1974 and 1977 and none was refused last year. That may be a reflection of the dearth of mobile projects because there are not enough to go round. We could do with a great deal more.
The IDCs are still an important component of regional policy and one of the most important factors in putting IDCs in context is the need to ensure that economic improvement takes place. That is the most important factor for the inner urban areas and the rest of the country. I hope that the Opposition will withdraw the new clause.

Question put, That the clause be read a Second time:—

The House divided: Ayes 8, Noes, 61.

New Clause No. 16

ACQUISITION OF LAND

'Where a designated district authority are satisfied that the acquisition by any person of land situated within the designated district or within the same county or region as the designated district would benefit the designated district, and the land in question is in the ownership of that authority, the said authority may dispose of such land to the said person on whatever basis, whether freehold or leasehold (and if leasehold, for whatever length) it may think fit; and the Secretary of State shall not seek to regulate or modify the terms of such a disposal.'.—[Mr. Steen.]

Brought up, and read the First time.

Mr. Steen: I beg to move, That the clause be read a Second time.
In view of the lateness of the hour, Mr. Deputy Speaker, I shall move the new clause formally.

Mr. Eyre: The subject covered by the new clause is of enormous importance to inner areas. However, I shall speak briefly in its support.
Vast areas of unused land in inner city areas are owned by local authorities. It is imperative that as much as possible of that land should be brought rapidly into productive use. It is particularly important that this land should be used mainly for small and medium-sized businesses.
If such areas are to be developed with the help of private enterprise without long delays, the local authorities in the inner city areas should be prepared to dispose of the land at market value, which may be below the cost of acquisition.
Often this land is held at book values which far exceed its true value. The value that it truly commands in the open market must be found so that a steady flow of disposals can take place and steady development can be speeded up.
In addition, local authorities and statutory undertakers, which also own great areas of inner city land, should be required to make such disposals upon request by a developer unless they have a specific intention of utilising the land themselves within a reasonable time. Local authorities and statutory undertakers should be put under an obligation to develop any land that they choose to

hold within a maximum period of three years.
Special difficulty arises under the Community Land Act. By reason of the general disposal consent issued by the Secretary of State under Section 42 of that Act, local authorities are not authorised to make disposals of land for development, except for housing, by leases of more than 99 years' duration. Also, there are limitations upon the area of land which may be so disposed of, down to as small an area as half a hectare. The specific consent of the Secretary of State for the Environment is required for disposals under longer leases or in respect of larger areas.
The financial institutions have made known their strong preference for longer leases as a basis for financing schemes for commercial and industrial development. The institutions and many who wish to carry on development believe that developers are being discouraged from seeking financial assistance for possible development schemes on this account and because the developers doubt the willingness of some local authorities to seek exemptions from the 99-year rule. The view of the institutions is that the general disposals consent should be amended to make longer leases, that is, 125 years, the rule rather than the exception. This would encourage developers to come forward with schemes which at present are stillborn.
One of the first requirements of dealing with inner area problems is that we should speed up, simplify and cheapen the disposal of land. I hope that the Minister will give very serious consideration to the terms set out in the new clause.

Mr. Guy Barnett: I am afraid that I shall have to ask the House to reject the new clause if the hon. Member for Liverpool, Wavertree (Mr. Steen) is unwilling to withdraw it. I shall set out my reasons for that as clearly as I can.
The main reason is that which has been given by the hon. Member for Birmingham, Hall Green (Mr. Eyre), namely, that, in general terms, the new clause runs counter to the Government's disposal policy. Indeed, as the hon. Member correctly states, the disposal policy allows the disposal of land for freehold for residential purposes. Also—the hon. Member did not mention this—we have given


a general disposal consent to local authorities of sites not exceeding 0·5 of a hectare in area or £25,000 in value, because pieces of land of that size have no significance within the terms of the community land scheme. The purpose of that scheme, as the House well knows, is to ensure that the community shares in future the increases in the value of land.
The issue with which the new clause is concerned is a good deal more complex than I think the hon. Member for Hall Green made it sound. It concerns more issues than merely the book value, which he described, although that is a real problem concerning land. There is the further problem of proper servicing of the land to make it available and attractive to developers. This is something about which my right hon. Friend and I are concerned in relation to the partnership areas. Indeed, as I think the House well knows, my right hon. Friend has approached the statutory undertakers to ask them to review their land holdings to see the degree to which they can make land available for redevelopment in inner city areas.
12 midnight
The hon. Gentleman referred to the issue of the 99-year lease. He is correct in saying that there is pressure for longer leases, especially from some of the funding institutions. Within the Department we have always operated as flexible a policy as we can to ensure that the best deal is available to the local authority and, therefore, ultimately to the community. If there has been a good case—undoubtedly a good case from the community's angle—for a 125 year lease, we have been prepared to grant it. In general, we must recognise that it is proper for the community to ensure that so far as is possible the community itself benefits from future increases in the value of land. That is why we are opposed, as regards industrial and commercial development, to large-scale freehold disposal or long-term leases that may operate to the disadvantage of the community as a whole.

Question put and negatived.

New Clause 17

URBAN AID FINANCE

'In pursuance of the making of financial provision for the needs of inner urban areas,

any amount deducted under section 1(2)(a) of the Local Government Grants (Social Need) grants that might be paid under section 1 of the Local Government Grants (Social Need) Act 1969 shall not exceed £10 million in any year.'.—[Mr. Alison.]

Brought up, and read the First tune.

Mr. Alison: I beg to move, That the clause be read a Second time.
We have the opportunity to consider an important new clause that gives us the chance again to think about the figures involved in the Bill. It is some importance that we should get the topic aired, discussed and on the record.
The engine room of this measure, which the Government feel is important and which we have supported so far—we did so pretty systematically in Committee—and helped the Minister to improve, is in the last analysis how much hard cash will be available. I am bound to remind the House that there is a good deal less gold than glitter. The sums involved are not dramatic by any stretch of the imagination.
The cash does not begin flowing until 1979. There is no great leap-off to grapple with the inner urban area problem as a matter of immediate urgency. We have quite a long time to go—well after the Bill has received Royal Assent—before the moneys start flowing. Even in the most needy sector to be covered by the Bill, the partnership areas, the sums are pettifogging. I am not saying that they are not valuable and welcome, but they are pettifogging in relative terms.
On my calculation, we have £66 million a year from 1979 to the end of 1981 to be spread over the seven partnership areas, which between them have a population of about 5 million. The per capita sum available is exactly £13 per head of population. These are not large sums in relation to the needs of the inner urban areas. The sum that the Secretary of State told us on Second Reading would be available for the second 15, for the programme areas, is £25 million per annum from 1979. If we make an allocation so that each area receives a proportionate sum, that is £1½ million per programme city from 1979. This is pettifogging money. It is less than the product of a penny rate for a number of the authorities, which they would be free to spend themselves.
However, to make such sums as are available appear in an even worse light, and one that I am bound to remind the Minister the Government have been at some pains not to publicise widely, all the sums allocated for this measure are to come out of the urban programme. That is what the Financial and Explanatory Memorandum told us in the Bill as originally presented. In the public expenditure White Paper, Volume 2, column 19, we read the following gloomy statement:
The increased provision for the urban programme"—
which is the source of the Bill's finance—
has been found from a re-ordering of priorities within existing expenditure programmes
Therefore, the urban programme is being increased to provide these modest sums for the activation of the Bill at the expense of a whole range of other Government expenditure on public spending programmes which are being fleeced to make provision for the urban programme. It is simply a re-ordering. Nobody will be not better off in terms of public spending at the end of the day because no real increase in resources is being made available.
However, that is by far the least serious and undesirable aspect of the financial provisions of the Bill. Having made it clear that the sum for this measure is to come from the enhanced urban programme and having discovered that the enhanced urban programme is being topped up from other spending programmes in the Government's public spending cornucopia, we find a most damaging provision in the way in which the urban programme operates. Perhaps I may now come to the specific wording of the new clause to draw attention to what exactly is involved. The new clause refers to
any amount deducted under section 1 (2) (a) of the Local Government Act 1974".
Part I of the 1974 Act deals with rate support grants. Section 1 of the 1974 Act provides that after assessing the total aggregate amount per grant the Secretary of State shall make certain deductions. By virtue of section 1(2)(a), these include specific grants. One of the specific grants in respect of which the Secretary of State makes deductions from the rate support

grant totals is the urban programme. Therefore, we find that the enhanced urban programme, which the public expenditure White Paper tells us is to be topped up by recourse to other programmes, will be topped up by recourse not to the whole range of public spending but necessarily, because of the way that the urban programme works, to rate support grant moneys. The enhanced urban programme will get all its extra money from the rate support grant aggregate sum. That, in effect, means from the non-metropolitan counties and those areas which are not getting a particularly good deal out of the rate support grant programme.
That is not only undesirable in itself, but directly against the interests of the kind of areas that the Government are concerned to try to help. Some of the programme areas—Middlesbrough, Hull, Leicester and Nottingham—are in non-metropolitan counties. Non-metropolitan counties are in fact receiving 20 per cent. below the average which is being made available for the needs element for the whole country. Therefore, non-metropolitan counties, which include some of the very places that the Government are trying to help, as a result of the rate support grant settlement this year, are receiving 20 per cent. below the national average for the needs element.
The effect of the financial provision in this measure is further to take sums from the overall rate support grant aggregate sums available—in other words, from the shire counties—to feed into areas of special need. But the Minister is cutting his nose to spite his face because, as I said, some of the very cities designated as programme cities for the purposes of the Bill will have further damage inflicted upon them from the way in which the urban programmes soak up funds from the overall funds available for rate support grant.
Indeed, it is worse than that if we look at one or two important towns and cities outside the 15 programme areas. Of course, they may be brought in later. The level of unemployment in the cities of Bristol, Plymouth and Gloucester is substantially higher than it is in Leicester, for example, which is one of the cities to benefit under the programme group of 15. Plymouth has an unemployment rate of 9 per cent., nearly double that of


Leicester. Plymouth, as a city in a non-metropolitan county, will not only be excluded from the provisions of this Bill because it is not one of the programme towns, but, being a town in a shire county, will contribute some of the sums made available under the Bill towards helping a city like Leicester with half its unemployment level. That is a totally unsatisfactory result, but whatever the Government do, they must not allow themselves to take yet more out of the overall rate support grant aggregate to top up the urban programme for this special operation.
For that reason, we have produced this reasonable new clause to make it impossible for the Government to take more out of the rate support grant aggregate than the existing programme of £10 million a year takes out of it. If they are to take more money to finance this operation, and to enhance the urban programme, it has to come from sources within the broad Government expenditure outlay, exclusive of the rate support grant aggregate.
I hope that the Minister will look at this new clause with sympathy and understanding and will accept it.

Mr. Steen: Our concern and that of the partnership cities is to learn this evening from the Minister whether they are to receive any hard cash in the next three years. The second question to which they want to reply is whether that cash is to be simply by way of more loans or by Government grants. They not only want to know whether the money will conic from the shire counties. There are fears among people in the outer cities who used to be in the inner cities that an increasing part of the domestic rate will be used to prop up the deficient rate base of the inner cities.
Most inner city areas covered by partnership agreements are short of rates, largely because of the amount of vacant land in them which produces no income. The result is that there is a deficiency of money from that area to pay for services which people remaining in inner cities rightly demand. The question is whether the Minister is proposing, not only to pinch from the counties, but also from people living in the outer areas.
The purpose of the new clause is to limit the amount of money which the Government can take from other sources and pump in through the urban aid programme. I am a great supporter of the urban aid programme which I regard as one of the most enlightened moves to bring new money to the ailing areas. It has done a lot of good and has given a great deal of help with capital and revenue expenditure. I am critical of the process by which it is given, and of the processes by which people affected are involved in the decisions. That is far from satisfactory. There have been one or two useful experiments in which people and local authorities were engaged in deciding a list of priorities but the Home Office, and now the Department of Environment, makes the final decision.
The question is whether the sole source of finance for the Bill in relation to the partnerships is determined by paragraphs 93 and 94 of the White Paper on resources. Will it come solely through a revamped and increased urban aid programme? In the White Paper, the Minister says that no fresh money will be made available. Where will the money come from?
12.15 a.m.
I hope that the Minister will not fall into the trap of letting the money that would go to the outer cities, where the people with many of the problems live, be diverted to the inner cities where there is a deficiency of population. One in eight of the population in the city of Liverpool is on the outskirts rather than in the inner area. The difficulty in Standing Committee was that we could not understand whether there was any fresh money, and if so, where it was to come from. Will the Minister explain, in language that our constituents can understand, where the money will come from?
I understand that a total of £30 million will be put into Liverpool in the next three years—£10 million a year. That is based on an urban aid formula. Will the Minister say whether the clause will help to put a ceiling on the amount to be spent? There would be a limit that would prevent a local authority going beyond its inner area. It would prevent a local authority switching more money than it would otherwise do.
The Minister may feel that some formula could be built in to protect the outer


areas from the potential problems of the inner areas.

Mr. Guy Barnett: I shall try to answer some of the specific points put by the hon. Member for Liverpool, Wavertree (Mr. Steen). I am aware that there has been some confusion on the subject of finance.
I begin with the basic proposition that there is not extra money. We cannot draw extra money from some source out of the sky. We must reallocate resources within the community to benefit areas of great social need.
The main source or finance to assist inner urban areas is through the rate support grant. That is not as a consequence of arbitrarily shifting large sums of money from the shires to the inner city areas to the disadvantage of the shires. It means that, according to the method by which the needs element is assessed, proper recognition is taken, and has been taken increasingly for some years, of the grave social problems of various areas, whether they be rural or urban. We should ensure that local authorities are given the necessary resources to cope with their problems. That has had the effect of benefiting the cities at the expense of areas which have fewer social problems with which to cope.
The hon. Member for Barkston Ash (Mr. Alison) pointed to the problems of certain cities which exist within the shire counties and which might be said to have existed as a consequence of the needs element. That is not quite true. In the national distribution through the needs element, we also expect local authorities to ensure that within their areas they shift resources to the areas of greatest need. For instance, in Lambeth which is a partnership area, the authorities would want to shift part of their own resources into the areas where the problems are greatest. The same might be true of Nottinghamshire and other counties.
It is important that I should begin with the RSG and the allocation of expenditure programmes by the local authorities because that is the bulk of the money with which we are dealing.
In the past I have referred to the enhanced urban programme as the icing on the cake. It is a relatively small part of the expenditure, and it is wrong to give the impression that this enhanced

urban programme is the funding which is available to finance the sort of expenditure which is being discussed in the Bill. That is not the case, because the urban programme will continue to support community projects and environmental projects which may not be directly related to the objectives of the Bill.
Expenditure may come from the urban programme or it may come from a key sector or a locally determined sector for expenditure of the sort that we are discussing. The sum of money mentioned in the Bill is required because it is the sum of money which indicates the total level of public expenditure that we expect to arise under the Bill. The Bill does not specifically vote a set sum of money for the purposes of the Bill.
I hope that I have given some explanation as to where we expect the money to come from. It will come from the reallocation of programmes at both national and local level, and additionally from an enhanced urban programme. It is for this reason that I cannot recommend the House to accept the new clause. Its effect would be to restrict the urban programme to only £10 million a year, and I am sure that that would not be the intention of Conservative Members.

Mr. Eyre: Will the Minister explain the significance of the loan sanction arrangements which are made for the local authorities, for the large sums of money they would be required to borrow, and how that obligation will fall on the general body of ratepayers within the cities to which these schemes apply?

Mr. Barnett: If the local authority borrows money the loan would have to be serviced from the revenue of that authority. It would be a charge on that authority. It is for that sort of reason that the needs element in these areas which we have selected, and where extra expenditure is needed, will take account, we hope—and in most, if not all, cases has taken account—in the indicators that are used, of the special extra need to spend money in these areas.
It is for this reason that I must ask the hon. Gentleman to withdraw his new clause. If it is not withdrawn, I suggest to the House that it should not be accepted.

Mr. Alison: The Minister has given a perfectly frank account, and I appreciate


his frankness in analysing the financial philosophy behind the financial provisions in the measure. He has told us that he means the whole operation to be a further factor in shifting the balance of advantage within the broad rate support grant ambit, unsatisfactory though many people consider the rate support grant arrangements to be at present.
It is a great pity that the Minister has not touched on the reason why it was necessary for the enhanced urban programme to draw its funds exclusively from this narrow sector of public spending. Why should not the Government have made up their mind to increase the sums available in the rate support grant settlement this year or for the next three years, 1979, 1980 and 1981, from resources taken from other programmes?
After all, the Department of the Environment and other Government Departments command vast, almost unimaginable, resources of public spending power in relation to this narrow sum of money. Why should not the extra sums be taken from other programmes outside the whole rate support grant system, in order to make extra money available for the rate support grant, so that extra money could be made available for the urban programme at the expense of priorities which are much less pressing and important?
The reason that I shall not press the new clause to a Division is that I hope that, in the light of this short debate, the Government will, when the Bill gets to another place, in tune with the consideration they have been giving to arguments throughout the course of the Bill, consider the possibility that, if there is to be a re-ordering and re-allocation of resources within public spending programmes, in order to increase the enhanced urban programme, there is at least an arguable case for saying that the skimming of the cream of public spending in order to top up the urban programme should be done on a wider canvas of public spending than simply the rate support grant.
I hope that the Minister will at least undertake to consider whether there might be advantage in seeking resources for this whole programme rather than simply a further rejigging of the existing unsatisfactory balance within the rate support grant arrangements. That disadvantages the non-metropolitan counties and, at the

same time, disadvantages many cities in the shires with serious social and employment problems. On that basis, and in the hope that we may get further consideration, I shall not press the new clause to a Division.

Mr. Guy Barnett: Obviously it is not my business to say how one would reorder Government programmes—whether one would cut expenditure on defence health, education or other forms of public expenditure in order to benefit the urban programme. It would not be possible for me to do that.
But in defence of the present position, the first thing I would make absolutely clear—I do not think the hon. Gentleman was clear about it—is that the urban programme money does not come totally from the rate support grant money. Money was made available to enhance the urban programme from funds other than the rate support grant money itself.
Secondly, it is worth mentioning that the rate support grant percentage—61 per cent.—has been maintained, which, by and large, has been of benefit to some local authorities. Thirdly, when talking about the urban programme money, we are talking about a relatively small sum of money in terms of the rate support grant as a whole. Therefore, to claim that this relatively small sum of money—as it has been called frequently during the debate—is of grave disadvantage to those parts of the country which do not receive it is perhaps a little unfair.

Question put and negatived.

Clause 1

DESIGNATED DISTRICTS AND DESIGNATED DISTRICT AUTHORITIES

Amendment made: No. 3, in page 1, line 15, at end insert
'or the council of the county or region which includes that district'.—[Mr. Guy Barnett.]

Clause 2

LOANS FOR ACQUISITION OF OR WORKS ON LAND

Mr. Alison: I beg to move Amendment No. 4, in page 2, line 4 after 'district', insert
'(subject to consultation with the district council of such district within which the said land in the same county might be situated)'.


The Minister knew that I would table this amendment. I need not detain the House long in explaining its purpose. It relates to the situation in which a designated district under Clause 2 happens to be a designated district council which has power to operate in respect of a neighbouring district, always supposing that the neighbouring district is within the same county, although not necessarily a designated district.
The purpose of the amendment is to ensure that when a district council decides to make loans or grants available to an applicant within a neighbouring district at least it informs, consults or gets the agreement of the neighbouring district council with regard to operation which it undertakes.
The Minister may have sympathy with this provision. I hope, therefore, that he will give it careful consideration.

12.30 a.m.

Mr. Guy Barnett: I have my doubts about the need for the kind of consultation proposed by the hon. Member for Barkston Ash (Mr. Alison,), and I expressed them earlier in our proceedings today. But it is clear that the Opposition feel strongly about this and believe that a proper requirement for consultation with a neighbouring district should be written into the Bill. In view of that, I am glad to agree on behalf of the Government to move a suitable amendment in another place.

Mr. Alison: In view of the willingness of the Minister to consider this proposition, and in the light of what he has said, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 3

LOANS AND GRANTS FOR IMPROVING AMENITIES, ETC

Amendments made: No. 6, in page 3, line 36, leave out subsection (1).

No. 8. in line 45, leave out from 'would' to first 'to' in line 2 on page 4 and insert
'benefit that area, they may make a loan or a grant or both.'.—[Mr. Guy Barnett.]

Mr. Guy Barnett: I beg to move Amendment No. 9, in page 4, line 8, at end insert—

'(bb) the cleansing of watercourses, whether natural or artificial, or the reclamation of land covered with water;'.

Mr. Deputy Speaker: With this it will be convenient to discuss Government Amendment No. 10, and the following amendments:
No. 15, in line 14, at end insert—
'(g) the reclamation of derelict land;
(h) the conversion of industrial buildings to other uses.'
No. 16, in line 17, leave out '(d)' and insert '(g)'.

Mr. Barnett: This amendment provides for works to rivers and canals and the cleaning of buildings and structures to be aided in industrial improvement areas. It fulfils a promise that I made in Committee to replace an amendment moved there with one more acceptably drafted.
We think it right for these types of works to be aided in industrial improvement areas in addition to those listed in the clause.

Mr. Geoffrey Finsberg: I welcome the amendments, which meet the points made in amendments which I moved in Committee and which I withdrew on the understanding that the Minister would try to find more suitable wording. The Opposition are most grateful to the Minister.

Amendment agreed to.

Amendments made: No. 10, in line 9, after 'the', insert 'cleaning or'.

No. 11, in line 9, at end insert 'and'.

No. 12, in line 11, leave out from 'bays' to end of line 30.—[Mr. Guy Barnettt.]

Clause 4

ARRANGEMENTS FOR DETERMINING ACTION AND SPECIAL AREAS

Amendments made: No. 19, in page 5, line 1, after 'is', insert 'or Ministers are'.

No. 21, in line 5, after 'he', insert 'or they'.

No. 22, in line 7, after 'district', insert
'or the council of the county or region which includes that district or both.'

No. 23, in line 9, after 'him', insert 'or them'.

No. 24, in line 13, leave out from '(2)' to 'arrangements' in line 22 and insert
'Where each of two or more districts includes the whole or any part of any inner urban area as respects which the Secretary of State is or Ministers are satisfied as mentioned in subsection (1) above.'.

No. 25, in line 25, leave out subsections (4) and (5) and insert—
'(3) In this section "Ministers" means the Secretary of State and any other Minister or Ministers of the Crown; and in subsection (1) above "action" includes the exercise of functions under this or any other Act (whenever passed) including, in particular, functions (whether of Ministers or councils) relating to planning or the compulsory acquisition of land.'.—[Mr. Guy Barnett.]

Clause 5

LOANS FOR SITE PREPARATION

Mr. Guy Barnett: I beg to move Amendment No. 27, in page 6, line 5, leave out "and".

Mr. Deputy Speaker: With this I understand, it will be convenient to discuss Government Amendment No. 28 and Amendment No. 29, in page 6, line 6, at end insert—
'(e) the reclamation of derelict land for industrial or residential purposes'.

Mr. Barnett: Hon. Members who served on the Committee will recall that these amendments are similar in content to several moved by the hon. Member for Hampstead (Mr. Finsberg) and opposed at the time by the Government. It may have appeared that we were being a little rigid at the time in not entertaining any extension, but on reflection, after the Committee had completed its work and we had reviewed the many words spoken, it appeared that there was more to be said for some of the amendments than was apparent on a first reading.
In the light of that, we put down these amendments, and we hope that they are acceptable to hon. Members.

Mr. Geoffrey Finsberg: It would be even more churlish of me not to thank the Minister this time. As he said, at the time, he advised the Committee not to accept similar amendments and he gave no undertaking. We are grateful that, with the help of his advisers, he has come forward with these amendments.

Amendment agreed to.

Amendment made: No. 28, in page 6, line 6, at end insert—
'(e) the construction of access roads; and (f) the provision of sewers or drains.
(2A) Where a designated district authority are satisfied that the carrying out—

(a) by statutory undertakers; or
(b) in Scotland, by a local authority for the purposes of the Sewerage (Scotland) Act 1968 of any works for the provision of electricity, gas, water or sewerage services for land situated within a special area would benefit that area, they may make a loan to any person for the purpose of enabling him to make any payments required as a condition of the carrying out of those works.'.—[Mr. Guy Barnett.]

Clause 6

GRANTS TOWARDS RENT OF INDUSTRIAL BUILDINGS

Mr. Guy Barnett: I beg to move Amendment No. 31, in page 6, line 22, leave out 'an industrial building' and insert
'a building which—

(a) is intended for use for industrial or commercial purposes; and
(b)is.'.

As I said when moving New Clause No. 2, the Government have accepted that the arguments put forward both in Committee and by many outside bodies that the provisions in the Bill that were originally limited to industrial buildings should be extended to cover commercial activities in general. This amendment enables designated district authorities in special areas to pay rent grants for buildings used for commercial as well as industrial premises.
The amendment also gives effect to an undertaking made by my hon. Friend the Under-Secretary of State for Industry in Committee following, I understand, a discussion with my hon. Friend the Member for Sheffield, Heeley (Mr. Hooley). He pointed out, quite correctly, that the Bill as drafted excluded buildings that were not at present used as industrial buildings but were intended to be so used; but conversely it included industrial buildings for which no industrial use was planned. My hon. Friend the Under-Secretary undertook to put this right, so this amendment enables a grant to be given to someone intending to use, for example, a redundant school for commercial or industrial purposes.

Amendment agreed to.

Clause 7

ADOPTION OF LOCAL PLANS

Amendment made: No. 33, in page 8, line 2, leave out
'the Secretary of State has entered into arrangements'
and insert
'arrangements have been entered into'.—[Mr. Guy Burnett.]

Clause 10

ORDERS AND DIRECTIONS

Amendment made: No. 44, in page 8, line 25, leave out '3(5)' and insert
'Grants for converting or improving buildings (3)'.—[Mr. Guy Barnett.]

Clause 12

INTERPRETATION

Amendments made: No. 35, in page 9, line 1, leave out from beginning to end of line 6 and insert
' "industrial improvement area", in relation to a designated district authority, has the meaning given by section (Declaration of, and changes in, industrial improvement areas) (2) above;'.

No. 37, in page 9, line 11, leave out '4(4)' and insert
'(Orders specifying special areas) (2)'.—[Mr. Guy Barnett.]

Schedule

INDUSTRIAL IMPROVEMENT AREAS

Amendment made: No. 39, in page 10, line 5, leave out from beginning to 'pass' in line 10 and insert:
'that conditions in an area within the designated district which is or, if developed in accordance with the development plan, would be a predominantly industrial area could be improved by the exercise of the powers conferred by section 3 or (Grants for converting or improving buildings) above, the authority may, after consulting the other designated district authority'.—[Mr. Guy Barnett.]

Mr. Guy Barnett: I beg to move Amendment No. 40, in page 10, line 34, after '(1)', insert'(a)'.

Mr. Deputy Sneaker: With this we may take Government Amendment No. 41.

Mr. Barnett: This is a minor improvement to the schedule. We think it right that if the Secretary of State should wish

to cancel the declaration of industrial improvement area after it has come into operation he should have to give a period of notice. Thus the amendments make a distinction between the timing of the effect of a notification under subparagraph 2(1)(a) of the schedule and of a notification under subparagraph 2(1)(b). Where a notification that an area is not to be an IIA is sent after the IIA has come into operation it cannot have effect for at least six months. This gives time for the IIA to be wound up, and although I cannot envisage that the Secretary of State would exercise this power on many occasions it seems reasonable to provide for this period during which any outstanding applications for grants or loans can be dealt with.

Mr. Geoffrey Finsberg: This brings us back to a point that I made earlier this evening about the Secretary of State making one of these orders. I asked in Committee—and I repeat my question tonight—whether, if the Secretary of State was going to revoke an order that had been made with the concurrence or consent of an elected body, namely, a local council, he would at least say that that decision would be taken by a Minister and not by one of his civil servants.
In Committee I instanced the discussions that we had had on the Coal Bill, where one received an indication that in certain cases it would be a ministerial decision. This matter is perhaps even more serious, because the Minister has said that he thinks it advisable to change the wording in the schedule to provide for six months' notice. I do not ask the Minister to give an undertaking, but I ask him to consider that where such a serious step as this is being taken which requires six months' notice, the decision should be taken by a Minister and not by a civil servant.

Mr. Guy Barnett: I think that I shall have to disappoint the hon. Gentleman because, although I said earlier that it might be rare for a Minister to revoke an industrial improvement area, if an industrial improvement area works it will, presumably, at some stage cease to need to be an industrial improvement area, and therefore, presumably, the time will come for it to be wound up anyway. I can imagine many occasions on which that might be a routine decision.
On the other hand there could, I suppose, be occasions when a revocation could take place unexpectedly. I think that in those circumstances I should be prepared to see what might be done within the Department to ensure that at least Ministers took cognisance of what was to be done, but I cannot give a precise assurance about the workings within the Department.
I said earlier, and I repeat, that as the Minister is answerable for decisions that are taken in these cases, officials will make the decisions on the basis of broadly laid down policies by Ministers.

Amendment agreed to.

Amendments made: No. 41, in page 10, line 35, at end insert—
'(2A) A notification under sub-paragraph (1) (b) above shall specify the date on which it is to take effect, and that date shall not be earlier than the end of the period of six months beginning with the sending of the notification.'.

No. 42, in page 11, line 25, after '3' insert
or (Grants for converting or improving buildings)'.—[Mr. Guy Burnett.]

Bill read the Third time and passed.

HOME PURCHASE ASSISTANCE AND HOUSING CORPORATION GUARANTEE BILL

Order for consideration, as amended, read.

To be considered this day.

COMMUNITY SERVICE BY OFFENDERS (SCOTLAND) BILL

That the Community Service by Offenders (Scotland) Bill may be proceeded with as if it had been certified by Mr. Speaker as relating exclusively to Scotland.—[Mr. Frank R. White.]

COMMUNITY SERVICE BY OFFENDERS (SCOTLAND) BILL

Order for Second Reading read.

Ordered,
That the Bill be referred to the Scottish Grand Committee.—[Mr. Frank R. White.]

Orders of the Day — Mr. NASRI BOUAZIZ

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Frank R White.].

12.45 a.m.

Mr. Robert Taylor: About a year ago, Mr. Deputy Speaker, at the end of March 1977, to be precise, I was approached by a distraught constituent who claimed that his rather immature daughter was about to marry a young man who was due to be deported and that the marriage was solely one of convenience in order to allow this young man to avoid deportation.
As like any other Member would have done I contacted the Home Office to ascertain the facts of the case and I was informed that the young man in question, who is the subject of this debate, Mr. Nasri Bouaziz, had arrived in this country in 1974. He had been given permission to enter the country for a period of one year, as a student, and he was allowed into the country on condition that he did not engage in any form of employment.
After 1974 he was not traced until late in December 1976, when it was found that he was working for Pye Telecommunications, in the borough of Croydon. Because he had overstayed the period for which he had been permitted to come into this country, and because he had broken the main condition upon which he had been allowed to come in, the Home Office, I understand, decided that he should leave and a deportation order was made.
That was in December 1976. In April 1977 the order was due to be enforced, but at the eleventh hour a marriage was contracted between the daughter of my constituent and this young man. In an endeavour to substantiate that this was a marriage of convenience, the father of the girl involved produced for me a photostat copy of entries from a diary made by his daughter that showed that even at that time she had suffered ill treatment at the hands of Mr. Bouaziz. The father was so worried about this contracted marriage that he wrote on 2nd April to the registrar of marriages in Croydon, saying:
Dear Sir,
This is a written objection to my daughter's intended marriage set for Tuesday 5th April 1977 on the grounds that it is a


marriage of convenience. The intended groom, one Nasri Bouaziz, was at the time of making the application for marriage under a deportation order, issued by the Home Office.
I well understand the great difficulty and dilemma of the Home Office at that time, because here was a young couple who, to all intents and purposes, were keen to get married and here was a parent objecting on the ground that it was a marriage of convenience. I well understand that at that time it was virtually impossible to prevent the marriage from taking place. In fact, it did take place at Croydon on 5th April 1977.
As the Member of Parliament involved, I naturally hoped that that would be the end of the affair and that I should hear no more because the marriage had turned out to be successful and happy, but as soon afterwards as 14th May the bride telephoned her father in a state of great distress. She was living in a hostel, in Clapham, and when the father visited her in company with a witness from his trade union he found her very distressed, with black eyes and in a very unfortunate condition. I met her at that time and can confirm that fact. Nevertheless, only three days later, the couple attended an office of the Home Office and both said that they wished to make a further effort to make the marriage successful.
I heard no more about the problem until 15th October when the father communicated with me again and told me that his daughter had returned to the family home in a state of nervous exhaustion and in fear of violence. As a result, the father instructed his solicitors to apply for an injunction to prevent his daughter suffering further molestation and to put in hand divorce proceedings.
Having seen the daughter I contacted the Home Office and set out the facts in a letter of 20th October. I asked for confirmation that the facts established that this was a marriage of convenience and that, under the law, the bridegroom should be deported in accordance with the original deportation order of December 1976.
I received a reply from the Minister, whom I am pleased to see here, dated 16th December 1977. She said:
I am sorry to learn that Mrs. Bouaziz is being so badly treated that she finds that she cannot continue with the marriage. Mr. Bouaziz is now without a basis of stay under the immigration rules and, in the circum

stances, I have decided that his leave to remain should be curtailed to expire on 31st December 1977. In the course of the next few days he will be notified of my decision, against which he will have a right of appeal to the independent appellate authorities.
On 4th January, I inquired whether an appeal had been lodged and whether this young man was still in this country. The Minister told me on 7th February:
Mr Bouaziz did not exercise his right of appeal nor apparently has he submitted any further timely application to remain on his former or any other basis. Steps will be taken to check whether he has embarked: if he has not, he would appear to be an overstayer and liable to prosecution for an offence under the Immigration Act 1971, the penalty for which is a fine of up to £200, up to six months' imprisonment, and liability to deportation.
I wrote again on 20th February to find out whether any steps had been taken to implement those stipulations in the Minister's letter. I received an acknowledgement on 17th March, but no confirmation that any steps had been taken.
At that time, the story took a bizarre turn. Mr. Bouaziz arrived at my constituent's home and demanded divorce papers as a matter of urgency. Indeed, such was the problem that he created that the police were called. He wanted the divorce papers because he claimed to be engaged to another girl. I therefore telephoned the Home Office and received confirmation that Mr. Bouaziz had applied to remain in this country on the grounds that he had become engaged again and the deportation order was not being acted upon because he "had his rights".
To summarise, this young man arrived here in 1974. He was permitted to come here as a student. I was informed earlier in my correspondence that he was not an altogether satisfactory student. He was permitted to be here for 12 months. He was told that he was not able to undertake any form of employment. I believe that in addition to the Pye employment he has had two jobs since, from one of which he was dismissed because of phoning Algeria on the company telephone and in company time.
In my view, this establishes probably the clearest case of a marriage of convenience under our present immigration laws. But if it is seriously believed that a young man who has been proved to have entered into a marriage of convenience can have a second bite at the cake


and contract a further marriage, it makes a mockery of our immigration laws. He could remain in this country continually on such a basis.
Therefore, I hope to hear from the Minister that firm action will be taken immediately in this case. In asking for her reply, I would like to express my apologies to her for keeping here here until this late hour. I realise that she has a very busy Department over which she presides. Certainly I find myself writing at least three or four letters to her each week. I apologise to the hon. Lady and thank her for her presence.

12.56 a.m.

The Under-Secretary of State for the Home Department (Dr. Shirley Summerskill): I thank the hon. Member for Croydon, North-West (Mr. Taylor) for his sympathy in our predicament at this late hour. As he has said, he has corresponded with me and telephoned for several months about this case, and he has restated some of the main facts.
Mr. Bouaziz came to the United Kingdom in 1974 and was given leave to enter as a student for 12 months on conditions prohibiting employment. He did not come to further notice until late in 1976, when it was learned that he was still in the country and working at Pye Telecommunications Ltd., in Croydon. He subsequently applied for leave to remain in anticipation of his marriage to Miss George, and they were both seen in the Immigration and Nationality Department in March 1977. It appeared that a stable relationship existed and had done for a considerable time, but, as there were no firm plans for early marriage, Mr. Bouaziz's application to remain was refused.
Mr. Bouaziz and Miss George went abroad on 6th April 1977 and on their return on 8th April Mr. Bouaziz produced evidence of their marriage on 5th April. The immigration officer granted him leave to enter for two months. On 17th May they were interviewed, both separately and together, and it appeared that, although there were stresses in the marriage, both wanted it to succeed. In view of this and the length of the relationship, and in accordance with normal practice under the immigration rules, Mr. Bouaziz was given leave to remain for 12 months, that is, until May 1978—next month.
Miss George's parents, who had expressed some concern about the marriage before it took place, as the hon. Gentleman said, had approached the Home Office in May 1977 about Mr. Bouaziz's conduct toward their daughter, including one violent assault, but Miss George herself said she still wished the marriage to work, and she thought the problems might revolve around her husband not having permission to work. In accordance with her wishes, Mr. Bouaziz was then given his present permission to remain until next month and to take work. I should point out that if after next month we wish to impose an employment restriction on Mr. Bouaziz he will have a right of appeal against that restriction.
The next the Home Office knew about the case was when, in October last year, Mr. George and his daughter came to the Home Office and the hon. Gentleman wrote to me asking that Mr. Bouaziz's leave to remain should be terminated because of Miss George's ill-treatment by her husband. After careful consideration I decided that it should be and so informed the hon. Member on 16 December last.
On 28th December 1977 notice of variation of leave to remain giving leave to remain only until 21st January was accordingly sent to Mr. Bouaziz's last known address. The order carries a right of appeal which must be entered within 14 days. As the hon. Member is aware from a subsequent letter I sent him, no reply was received within the 14 days and steps were taken to see whether he had complied with the order.
In his letter to me on 22nd February the hon. Member kindly sent me Mr. Bouaziz's home address. Consequently, the police went there on two occasions but failed to find him. Eventually, on 9th March, he was traced to his place of work and interviewed by the police who were informed that he had moved address some time before the variation order was sent to him.
As there was no firm evidence that he had received the variation order, a copy was served on him on 10th March. Against the re-served order Mr. Bouaziz entered an appeal the same day and accompanied it with a letter saying that he is living with another girl whom he wishes to marry immediately he is divorced from his wife. This letter has been


treated as an application to stay pending his proposed second marriage. As Miss George has not instituted divorce proceedings so far, there are no immediate prospects of marriage and the application has been refused.
A refusal of an application for an extension of leave to remain gives rise to the same appeal rights as does a variation order curtailing leave to remain. Further information has been provided by Miss George about the case, some of which provides grounds for believing that on Mr. Bouaziz's but not necessarily Miss George's part the marriage may have been one of convenience.
In view of other information provided by Mr George and Miss George since 10th March, it was decided that Mr Bouaziz's continued residence here was not conducive to the public good. A notice of intention to deport was served on Mr. Bouaziz on 24th April. This also gives rise to appeal rights. Mr. Bouaziz is still within the time to appeal under both heads. He has 14 days from 24th April to do this.
The House will appreciate that as the Home Office will be party to any appeal hearings I may not discuss the merits of

the case pending the outcome of the appeal that has been entered and others that may be associated with it. The House may wish to know, however, that the effect of entering an appeal is to prevent a person being removed from the United Kingdom under the Immigration Act until the appeal has been determined. The appeal rights were written into the Immigration Act to prevent oppressive behaviour by the Executive. Inevitably cases will arise from time to time when residents will feel concern about the continued presence here of people who have been required to leave but have appealed—Mr. Duke was a recent example—but this is part of the price we must pay for the freedom we enjoy.
I hope that I have explained the rather complex procedures to which this case has given rise. The hon. Member will appreciate that there is one appeal pending and possibly two others which Mr. Bouaziz may wish to enter. That is why there is a delay in proceeding any further at present.

Question put and agreed to.

Adjourned accordingly at four minutes past One o'clock.

Orders of the Day — Second Reading Committee

Wednesday 26th April 1978

The Committee consisted of the following Members:


Mr. Arthur Blenkinsop (in the Chair)


Bates, Mr. Alf (Bebington and Ellesmere Port)
Mather. Mr. Carol (Esher)



Orbach, Mr. Maurice (Stockport, South)


Bradley, Mr. Tom (Leicester, East)
Parry, Mr. Robert (Liverpool, Scotland Exchange)


Carlisle, Mr. Mark (Runcorn)



Craig. Mr. William (Belfast, East)
Roderick, Mr. Caerwyn E. (Brecon and Radnor)


Fletcher-Cooke. Mr. Charles (Darwen)



Gardner, Mr. Edward (South Fylde)
Short, Mrs. Renée (Wolverhampton. North-East)


Havers, Sir Michael (Wimbledon)



Hutchison, Mr. Michael Clark (Edinburgh, South)
Stanbrook, Mr. Ivor (Orpington)



Summerskill, Dr. Shirley (Under-Secretary of State for the Home Department)


Johnson, Mr Walter (Derby, South)

Orders of the Day — SUPPRESSION OF TERRORISM BILL [Lords]

10.30 a.m.

The Under-Secretary of State for the Home Department (Dr. Shirley Summer-skill): I beg to move,
That the Chairman do now report to the House that the Committee recommend that the Suppression of Terrorism Bill [Lords] ought to be read a Second time.
The primary purpose of the Bill is to enable the United Kingdom to ratify without reservation the European Convention on the Suppression of Terrorism. The convention is a Council of Europe convention and as such is restricted to member States of the Council of Europe. It represents a response by those European States which share common democratic values and a respect for human rights to the numerous and horrible acts of international terrorism which have taken place in Europe and elsewhere in the past 10 years.
The convention has its origin in a recommendation of the Consultative Assembly of the Council of Europe which was adopted in May 1973, only a few months after the murder of Israeli athletes

at the Munich Olympic Games. This country played a major part in the negotiation of the convention, and the late Mr. Crosland signed it on behalf of the United Kingdom on the day it was opened for signature, along with all the then members of the Council of Europe except Malta and the Republic of Ireland. Spain subsequently joined the Council of Europe but has not signed the convention.
The Government's intention to seek parliamentary approval to enable the United Kingdom to ratify the convention without reservation at the earliest opportunity was announced on 17th January 1977 by the present Foreign Secretary, who was then Minister of State at the Foreign and Commonwealth Office.
The convention may be seen as an extension of the arrangements created for dealing with acts of terrorism which are set out in the Hague Convention on Hijacking, the Montreal convention which deals with offences against aircraft, and the Internationally Protected Persons Convention, which was signed at New York.
Those conventions are aimed at acts of terrorism which are international in character, and they require contracting States either to extradite fugitives accused of these offences or to take steps to prosecute them. Contracting States to these three conventions are consequently obliged to take jurisdiction over the offences wherever and by whomsoever committed, if the offender is present in their territory and is not extradited.
The United Kingdom has ratified the Hague and Montreal conventions and a Bill to enable us to ratify the Internationally Protected Persons Convention has passed through all its stages in this House and is now in another place.
The European Convention on the Suppression of Terrorism substantially extends the arrangements under those conventions—the other three I have mentioned—by covering a much wider range of offences and by obliging contracting States to disregard for the purposes of extradition between them the political element in some of the offences covered by the convention.
This last obligation is the most radical aspect of the convention. It enables effect to be given to the chief aim of the convention, which is to facilitate the extradition of terrorists. Extradition of an offender to the place where he is alleged to have committed a crime is, in our view, the most effective way of bringing that offender to justice because the evidence and the witnesses will be available there.
Accordingly, Article 1 of the convention requires contracting States not to consider certain specified offences as political offences, or as offences connected with political offences or as offences inspired by political motives. The offences are those covered by the Hague and Montreal conventions on hijacking and attacks against aircraft, serious attacks on internationally protected persons, kidnapping and the taking of hostages, and offences involving the use of bombs, grenades, rockets, automatic firearms or letter or parcel bombs if this use endangers persons.
Article 2 is concerned with certain additional offences in the same way as those in Article 1. These offences are any serious crimes involving an act of violence against a person or one involving an

act against property which creates a collective danger for persons, or an attempt to commit these offences or participation as an accomplice of a person who commits or attempts to commit them.
Hon. Members will appreciate the importance of those two articles. There is at present in our law only one exception to the traditional prohibition on extradition for political offences. The Genocide Act 1969 provides that the crime of genocide shall not be considered as an offence of a political character for the purposes of extradition. Hon Members will be aware of the extent to which, in recent years, this political safeguard, as it is known, has been abused by terrorists in order to prevent their extradition to the place where they are alleged to have committed terrorist offences.
The member States of the Council of Europe took the view that an obligation to remove the prohibition of extradition for offences of a political character was justified between States sharing common democratic values in order to deal effectively with the increase in acts of international terrorism.
In considering how to make the convention as effective as possible, we have decided that we should exercise the discretion provided in Article 2 and treat the offences in Article 2 in the same way as those in Article 1. Schedule 1 to the Bill sets out the United Kingdom equivalents to the offences in Articles 1 and 2, and Clause 1 removes those offences from the ambit of the political offence safeguard in extradition.
Clause 1 also gives effect to Article 8 of the convention by providing that the traditional bar to the taking of evidence in the United Kingdom for use in criminal proceedings abroad which are of a political character is removed for proceedings in respect of offences covered in Articles 1 and 2 of the convention.
The convention is aimed at terrorists and it has been carefully and deliberately drafted to ensure that the removal of the prohibition of extradition for political offences does not endanger genuine political refugees. I know that there has been apprehension in some quarters about the effect of the convention and the Bill from this standpoint. It may be helpful to put on record a full explanation of the safeguards which the convention and the Bill


provide for political refugees and out reasons for believing that this Bill presents no danger to them.
I should point out that the convention is restricted to member States of the Council of Europe. As I have said before, those States share the same concern for human rights and the fundamental freedoms. This concern is, in fact, a condition of membership of the Council of Europe, and any member State whose Government departs from these high standards is disqualified from membership.
Hon. Members may recall that Greece was expelled from the Council of Europe after the colonels' regime took over. Any contracting State to the convention whose Government was overthrown in a coup d'etat and which then became authoritarian would be excluded from the Council of Europe and thus from the convention. It is, therefore, extremely unlikely that a fugitive from a contracting State who was accused of an offence covered by the convention would be a political refugee.
Nevertheless, in addition to that basic safeguard the convention itself provides a specific safeguard aimed at protecting the genuine political refugee. The United Nations Convention relating to the Status of Refugees, which we have ratified, defines a political refugee as one who has a
well founded fear of being persecuted for reasons of race, religion, nationality, membership of a particular social group or political opinion
and is therefore unwilling to return to his country of origin.
Article 5 of the European Convention on the Suppression of Terrorism provides that a request for extradition in respect of an offence covered by the convention may be refused if the requested State
has substantial grounds for believing that request for extradition … has been made for the purpose of prosecuting or punishing a person on account of his race, religion, nationality or political opinion, or that that person's position may be prejudiced for any of these reasons".
Thus, Article 5 clearly reflects the principle that persons who come within the definition of political refugee contained in the United Nations convention should not be returned to their country of origin. As far as the political refugee is concerned, it is his political opinions which are, relevant and the motive for which his

extradition is requested. The safeguard in Article 5 covers both aspects. It has already been incorporated in our extradition arrangements with Commonwealth countries under the Fugitive Offenders Act 1967, and Clause 2 of the Bill makes provision for its incorporation in the Extradition Act 1870.

Mr. Ivor Stanbrook: The hon. Lady refers to the provisions of the United Nations convention and, indeed, to the provisions of the convention we are discussing today, neither of which is law in the United Kingdom. The hon. Lady then says that the definition of a political refugee has already been incorporated in the Fugitive Offenders Act, which is part of our law. But the Fugitive Offenders Act retains the protection for offences of a political character.
In those circumstances, how can the hon. Lady justify the fact that we are taking out of our present law what has traditionally been regarded as protection for political refugees in extradition matters in order to insert something which, basically, has never been part of our law?

Dr. Summerskill: Although the hon. Gentleman says that the matter I have been speaking of is a United Nations matter, we have ratified the convention that I mentioned relating to the status of refugees. Therefore, although it may not be strictly a law, we have ratified it, and I think that ratification of a United Nations convention has great importance and significance within our law.
I could give the hon. Gentleman later a list of the countries in the Council of Europe which also have ratified that United Nations convention, if he would like me to. Obviously, I cannot read the list out now.
Let me now give an example to show how matters may proceed. If the Government of the requesting State suddenly changed for the worse while an extradition case was proceeding, and before there was time for that State to be excluded from the convention, the fugitive whose return was requested could, under the 1870 Act as the Bill would amend it, claim the protection of this safeguard not only in the courts, but also—I come to the further safeguard—in an appeal at the end of the day to the Home Secretary himself, who could, if he thought


fit, reverse a decision of the courts to commit the fugitive for surrender.
After extensive consultation, we are in no doubt, therefore, that the convention does not in any way affect the Home Secretary's right to grant political asylum and that the genuine political refugee has nothing to fear from this Bill, bearing in mind those three safeguards.
I turn now from extradition to prosecution. Clause 4 gives effect to the back-up prosecution provisions of the convention, which are set out in Articles 6 and 7. These articles together require a contracting State to put the case to its prosecution authorities where the fugitive is present in its territory and is not extradited. The obligation is, however, qualified in some important ways, although, as I shall later explain, we have not thought it appropriate to translate all these qualifications into the Bill.
First, it is necessary that a request for the extradition of the fugitive from another contracting State should have been received and refused. Second, that request must be in respect of an offence covered by Article 1 of the convention. Third, the requesting State's jurisdiction over the offence for which extradition is requested must, in the words of Article 6,
… be based on a rule of jurisdiction existing equally in the law of the requested State".
This means that the law of the requested State would have similar jurisdiction over the offence if it had been committed in corresponding circumstances. For example, if a request for extradition was received from Germany in respect of an offence for kidnapping committed in Germany and that request was refused, the United Kingdom would be obliged to consider prosecuting the fugitive because the United Kingdom had jurisdiction over the offence of kidnapping when committed in the United Kingdom.
With regard to an offence committed outside the territory of the requesting State, we should be obliged to consider prosecuting the fugitive only where the United Kingdom court exercised jurisdiction over the offence when committed outside the United Kingdom in corresponding circumstances. An example would be murder committed abroad by a national of the requesting State outside that State, since in such a case we

would have had jurisdiction had the offender been a citizen of the United Kingdom.
Clause 5 is additional to the convention. We believe it sensible to provide for the possibility of arrangements based on the convention with States which are not parties to it. I should point out that under subsection (5) of Clause 8 an order may not be made under Clause 5 without affirmative resolutions of both Houses. This will ensure that Parliament will have a full opportunity to examine any arrangements proposed and, of course, prevent them from coming into being if it so decides.
We have no immediate plans for bilateral arrangements under Clause 5 at present, but if discussions which are under way in the Nine on a terrorism convention are successful, it may be that orders under Clause 5 will be needed to enable us to give effect to that convention.
I believe that the European Convention on the Suppression of Terrorism will be a powerful weapon in the fight against terrorism. Austria and Sweden have already ratified it, and a number of other States are expected to do the same during the course of the year. The Government are anxious that the United Kingdom should be among the States that have lost little time in assuming the obligations of this convention. I hope that hon. Members will agree that the Bill should be given a Second Reading.

10.48 a.m.

Sir Michael Havers: We are grateful to the hon. Lady for the way in which she has explained the purposes of the Bill, which started in another place and was to some extent improved there.
The basic operation by which terrorism so often acts is that the terrorists commit the crime in a country other than their own and then take refuge in a third country. That is the problem which has been facing the world—and certainly Europe—over the past few years. As the hon. Lady told us, the background starts in 1970 with the Hague convention, which was followed by the Montreal convention and the New York convention. Those all related to aircraft and internationally protected persons. Terrorist attacks have much wider targets, and it has been much too easy


to say that the crime was politically motivated even though it was a crime of murder or extreme violence.
The principle of allowing in such cases the country in which the terrorists have sought refuge to prosecute them for the offences, even though not committed within the territory, is an important step forward.
I have always found it very difficult to accept that a violent attack which led to the death or maiming of the victim or victims could successfully evade criminal prosecution on the plea of political motivation. Safeguards must, of course, be brought in. I am satisfied that the Bill covers the exceptional case, and particularly the genuine case of political asylum.
I am slightly concerned about the matter raised by my hon. Friend the Member for Orpington (Mr. Stanbrook) and the hon. Lady's answer about ratification. We shall have to look at that again. I have no doubt that her Department will consider it before we reach the Committee stage. We might have to clarify the matter in Committee in order to resolve any ambiguity or risk of loss of protection in the genuine case of political asylum.
Inevitably, any convention, and thus any Bill based on such a convention, can be wholly effective only when all countries concerned are prepared to be involved and to play their part in enforcing the rules and obligations. We shall have reluctantly to accept that there will be some countries which will continue to shelter hijackers and other terrorists.
The Bill puts into effect the Council of Europe convention, and we must recognise that some countries will continue to defy the standards that we now accept. But experience is proving that those countries are decreasing in number and that our European policy is being more widely recognised and accepted than was the case a few years ago.
For myself, I would argue that countries which offer haven to terrorists could eventually be persuaded to be realistic and accept that international terrorism must be stamped out. One way of doing that would be to convince them that in the end it can only be in their interest—in the interest of all States—to recognise that terrorism of this kind

must ultimately put at risk democracy as we, and those States, know it.
What sort of terrorism are we dealing with? It is designed to force a sovereign State to act by fear or threat against its own public interest. Put another way, it is the use of terror to force a Government to accede against their will to a course of conduct which they would not ordinarily follow. Once that happens—by bombing or the taking or even killing of hostages—and the resolution of that State has been weakened, the will to resist in the future diminishes so that ultimately the terrorists, and not the State itself, rule.
It follows, therefore, that terrorists must not be allowed to commit their acts of terrorism and then go free. Ideally, they should be returned to the country in which they committed their crimes. If that is not acceptable or possible, at least the country where they have sought refuge should have the opportunity of trying them for the crimes they have committed.
We must not be misled by the nineteenth-century view which properly gave political asylum to those who held intellectual or political views that disagreed with their country's ideologies. We must not confuse that liberal approach with those who seek, by murder and atrocity, to force a Government to act against their will.
For those reasons, the Opposition support the Bill.

10.53 p.m.

Mr. Charles Fletcher-Cooke: It is always wrong to quote one's own speeches, but I think that in this case I should be allowed to do so. On 13th November last year, I had the honour to be the Rapporteur of the Political Affairs Committee of the European Parliament and I introduced a motion on this subject to the European Parliament which was accepted without any dissent.
The motion urged all the members of the European Parliament to do what we are doing today, namely, to ratify most of these conventions but particularly the Convention of the Council of Europe. It was clear when I introduced that motion that it was necessary to allay the fears which the hon. Lady mentioned, namely, the apprehensions that this in some way will detract from the traditional rights of asylum.
I sought to allay those fears by pointing out that, whereas in the nineteenth century the person who sought asylum was a refugee from tyranny, today the seeker of asylum is a refugee from democracy in the sense that the object of terrorism today, certainly in Germany and in Italy, is so to conduct, or rather to disrupt, public affairs that what are at present democracies are obliged to turn themselves into tyrannies. It is exactly the obverse of what occurred in the nineteenth century.
In my speech in the European Parliament at Strasbourg I said:
Apart from the extreme effectiveness of modern weapons, the feature of terrorism which distinguishes it, I suggest, from those more traditional forms of dissent is that the purpose of the terrorist is not to make a tyranny or dictatorship tolerant and more democratic, but to make a democratic society more tyrannical and more dictatorial. Insofar as it is possible to distinguish the motives of the recent terrorists in Europe, they are to force upon a democratic country measures in protection of its citizens, most of whom are totally innocent, measures of protection which will inevitably interfere with their liberty, with the rule of law, with the normal proceedings of the courts and with fundamental human rights. The terrorist seeks to drive the democratic State into the position of an authoritarian and totalitarian tyranny, and that is what distinguishes the modern terrorist from the more traditional forms of dissent.
That is exactly the opposite, in fact, of what happened in the nineteenth century. For that reason we have to take exactly the opposite countermeasures, and this Bill is one of them. It therefore deserves the support of all of us.
There are matters which we must consider in greater detail in Committee, but by and large it will serve no purpose to go on emphasising one's support, save to say that every Member who spoke in that debate in the European Parliament supported the motion for a resolution urging all member States to ratify the convention and all except one have done so or will do so.
If the hon. Lady is to reply to the debate, will she say whether we are, either alone or with our colleagues, urging that one State—namely, the Republic of Ireland—to do her duty in this matter?

10.57 a.m.

Mr. Mark Carlisle: I wish briefly to add my welcome and support to the Bill, which I consider to be an important step

forward in the suppression of international terrorism.
It is, perhaps, a sad commentary on our situation today that such a Bill is necessary. But that it is necessary I have no doubt. I consider that international terrorism or urban terrorism of any kind, whether it consists of the hijacking of aeroplanes or the appalling tragedy of the kidnapping of Signor Moro, is one of the major scourges of the present generation. It seems that all acts of this nature have one thing in common—the very indiscriminate effect of the actions which are taken. They appear to require and include the wanton killing of innocent people for political ends in which those people themselves have possibly no interest and over which they certainly have no control.
The passengers in an aircraft hijacked on an international flight have no power in themselves to release the prisoners whose release is demanded in exchange for their lives. On many occasions the State against which the claim is made is itself not able to meet it. What is clear is that it never can be in a position when it could, or should, meet it, because there is no doubt but that terrorist activity breeds purely on the success of previous terrorist activity. Tragic as it may be for the innocent people involved, no progress will be made unless all countries are prepared to stand together and refuse to give in to the demands of the terrorist. Every time one country gives in, that will create the precedent for further and more outrageous terrorist action.
I saw a certain amount of this, while at the Home Office, in relation to the actions of the IRA in this country. The IRA's activities resulted in the innocent killing and maiming by bombs of people who themselves had no control over the political future of Ireland. The casualties resulted from the activities of fanatics trying to make a point. That led me to believe that the only satisfactory way to approach conduct of this kind is by looking upon it as analagous to warfare upon society and conduct which merits exceptional steps to deal with it.
Clearly, this Bill is exceptional, to an extent, in that it will change the law on extradition, but I believe that the exceptional times we live in require exceptional measures of this nature. I suppose


the only thing one can say is that a whole generation has now grown up which has known no major international war but which still has had to face the problems of urban guerilla activity and international terrorism.
I welcome the fact that the Bill allows us to bring into our domestic law the European Convention on the Suppression of Terrorism, which we have already ratified. I am glad, too, that the whole of that convention works on the basis of extraditing to the country in which the offence was committed as a first step rather than the alternative of trying the person who has escaped to a third country in the third country.
That is important for two reason. First, it is always easier to provide the evidence on which the trial can take place in the country in which the offence has been committed. I can see grave difficulties in trying people in this country for terrorist offences committed abroad when the whole of our system of trial requires the presence of witnesses to give evidence in person. Secondly, surely, the whole problem of the punishment of those people should rightly be an issue and a problem for the country in which the terrorist activity takes place, rather than be thrown upon the shoulders of the country to which that terrorist chooses to escape.
Serious problems arise over the form of penalty which it is appropriate to impose for terrorist activity. The country which should have to take those decisions and exercise its form of penalty is the country in which the terrorist activity took place, rather than the jurisdiction of the courts into which the person happens to flee.
I welcome the fact that the Bill will allow us to go wider than merely those other countries that have ratified the European convention. It is right that other countries whose judicial process we accept should have a similar provision, as we have under the Bill with our neighbours in the Council of Europe. I can see absolutely no reason, for example, why the Bill should not be extended to other Commonwealth countries, and I am glad that the power is given in the Bill to do just that, Indeed, if I may add say something slightly outside the terms of the Bill, I

believe that our extradition laws generally are somewhat restrictive and need to be looked at again.
In 1972, we had certain arguments with the Australian Government over issues of extradition. For a person to be extradited to another civilised country in whose judicial procedure we have faith, it should be adequate for that country to show prima facie that the person at present in this country has committed an offence in that country. I do not believe that it is necesary to go further, as we do at present, and, for example, require that, once returned, such a person cannot be tried on any offence other than the one on which he is extradited.
If we have faith in the fairness and impartiality of the judicial procedures of other countries, I think that there is a case for relaxing some of the strict technical rules surrounding our extradition policy. As regards these types of activity, we are right to remove the defence that the offence was of a political nature.
I want to ask the hon. Lady two final points. First, to support what my hon, and learned Friend the Member for Darwen (Mr. Fletcher-Cooke) said, is it not a tragedy that the Republic of Eire has not ratified this convention? Surely, it has a fundamental and equally important reason for wishing to see the end of terrorist activity. Yet as long as the Republic refuses to ratify the convention it is bound to give the impression that it is prepared to harbour a certain type of terrorist activity. Surely, in the long run it must be realised that the activities of, for example, the IRA are just as great a danger to its Government as they are to Northern Ireland. What, if any, action are we attempting to take to persuade the Republic to sign the convention?
Secondly, can the hon. Lady say exactly what Clause 2 means? Saying that someone shall not be extradited where he may be prejudiced in his trial by reason of his political opinions is going very near to saying that the defence of its being an offence of a political nature still applies. I should have thought that a member of, for example, the IRA being tried in Northern Ireland could argue that, as his political opinions as a member of the IRA were well known, that could prejudice him at his trial. I should be glad to have the hon. Lady's


assurance that the wording of Clause 2, which seems very wide, in no way detracts from the effectiveness of Clause 1.
Anything that removes the barriers to the return of terrorists to the country in which they have committed their activities, so that they can stand their proper trial, is welcome. I believe that the Bill is a move in that direction.

11.9 a.m.

Mr. Edward Gardner: This Bill is necessary, and in Committee, no doubt, such imperfections as it now has can be remedied. But the Bill is very limited by its nature and, indeed, by the European convention on which it is based. Neither the Bill nor the convention will stop international terrorism any more than the three previous conventions which preceded the European convention have been able to stop terrorism, whether by hijacking or by any other of the horrendous methods, of which the kidnapping of Signor Moro is perhaps the worst and certainly the latest example.
One comment to be made about the Bill, and the convention—when one talks about the Bill one is really either applauding or criticising the convention—is that a little progress is better than no progress at all. But if we are being realistic—it is to be hoped that we are—and we are aiming ultimately at making terrorism a crime which people will less frequently commit because of the danger of subsequent apprehension and punishment, we have to recognise that, in the case of aircraft hijacking, for example, the countries which are likely to provide a haven for the hijackers are countries not in Europe but well outside Europe which have nothing to do with and no interest in conventions of this kind. It must be well understood that such countries have political sympathy in many cases with the purposes of the hijacking.
The only way that we shall ultimately make any serious and effective impact on this problem is by making as sure as we can, by using all the resources and influence we can bring to bear upon them, that countries which give a haven to hijackers know full well that they will suffer for what they are doing. Is it not time that this Government tried to use their influence—indeed, I hope that they are already

—in the Council of Europe, in the European Parliament and elsewhere to see whether there can now be agreed a collective policy among the European Governments, focusing our attention on this limited scale for the moment, which eventually can be extended to other civilised Governments who can take joint and effective action against those countries which are prepared to take in and protect the people responsible for terrorism?
What we are trying to do in the Bill is to consent, and rightly so, to a diminution of the right of someone who commits a crime abroad, or some act which a Government abroad may regard as a crime, then to rely on the Government here to give him asylum because of the political character of the motive behind the act committed abroad.
Before the grant of political asylum can be exercised, one looks at the purpose or motive of the person who has committed the act or crime. One looks also at the purpose and motive of the State which is requesting his extradition. We have a duty also to have regard to the prospective treatment which that person will receive if he is sent back to the country which is asking for his extradition.
The Minister has rightly pointed out that Article 5 of the convention expressly deals with the right of a contracting State to refuse to extradite a person if there are substantial grounds for believing that the request for the extradition has been made for the purpose of prosecuting or punishing a person on the ground of his race, religion, nationality or political opinion.
But, as my hon. Friend the Member for Orpington (Mr. Stanbrook) pointed out in his intervention, although the Minister has rightly said that the Fugitive Offenders Act 1967 reflects the provisions of Article 5, the fact is that the Fugitive Offenders Act will now, surely, have to be amended either by the addition of provisions or by some other alteration in order to conform exactly with the provisions of Article 5.
No matter what the spirit of the Fugitive Offenders Act may be, the law as set out in that statute appears to be different from the provisions as expressed in the convention. No doubt, as my right hon, and learned Friend the Member for


Wimbledon (Sir M. Havers) said, this is a matter which we can and ought to look at in Committee.

11.17 a.m.

Mr. Ivor Stanbrook: I am sorry that I cannot join in the general support for the Bill which has so far been expressed. I am sorry that the Bill was not taken on the Floor of the House. In my opinion, it should have been because it deals with the principle of political liberty, a principle which we should not curtail except after the most thorough public discussion of the justification for so doing.
I believe that, by the Bill being removed to a Second Reading Committee, whatever the merits of the procedure, and whatever the distinction of the members of the Committee and of those taking part in the debate, inadequate consideration will be given to a most important matter. It has already received attention from the national Press, and great anxiety has been expressed as to what we are doing in enacting the Bill.
Because I appear to be the only one who is not in favour of the Bill, I hope that I shall have the indulgence of the Committee if I take a little time to explain why that is so.
The Bill had, I think, inadequate examination in the other place. I mean no disrespect to the noble Lords who took part in the debate. One of them was a lawyer, but none of the Law Lords took part, which was a great pity because some of them are experts in extradition law and have comparatively recently delivered opinions on offences of a political character which, had they repeated them in that debate, would have been of great assistance to us in considering the advisability of giving the Bill a Second Reading.
The danger we face is the curtailing of political liberty at a time when we are particularly incensed by recent events of terrorism. But, of course, it is just when we feel such abhorrence that we must be most careful lest our natural reaction should restrict an important principle.
We are dealing with a complicated subject. The Bill is complicated enough, but we are putting it in an extremely complicated context. Our extradition law is complicated, and, no doubt, by the time

I have finished my speech—if anyone accepts the way I put it—there will be agreement about that. The law should be rationalised. Some of my hon, and learned Friends have already referred to the difficulties of the present extradition law. But instead of rationalising it, we are today building a hornet's net around it, making the whole subject of extradition that much more difficult to understand and to apply in our courts.
I shall look, first, at the present position and then at how the Bill proposes to change it. The Bill, as the hon. Lady has told us, proposes, first, to change the application of the old traditional concept of exemption from extradition crimes or offences of a political character; second, to add to the list of extradition crimes relevant offences which may be covered by extradition; and, thirdly, to give extra-territorial jurisdiction to our courts in respect of certain offences.
Those three propositions would be difficult enough for us to understand, but piled on top is the consideration that they apply only in respect of certain offences, those which are named in the schedule. When the Bill is passed, and before any Orders in Council are made, they apply only in convention countries, which means parties which ratified the European convention, and only to those already in extradition treaty relationship with us.
The convention can apply to the Republic of Ireland. It can apply if it is a country which ratifies the convention. It can be applied to Ireland unilaterally by this country anyway under the provisions of the Bill so that we can operate it with regard to Ireland but not have the benefit of Ireland operating it towards us. It can apply also to any State in the world which the Secretary of State cares to nominate by Order in Council.
I know that the hon. Lady said that we have the safeguard that before the convention arrangements are applied to a dictatorship we shall be able to discuss the question in the House, but she knows as well as I do that that is not an adequate safeguard for dealing with such a fundamentally important political principle.
The Bill deals with certain minor matters with some of which I shall deal if I am lucky enough to be appointed to the Standing Committee, and I come now to my major argument.
First, on "political character", my contention is that the convention and the trend as it has been expressed in international law, giving rise to the convention, to deal with political character as being a matter of the motives of the requesting country is wrong, because there are two sides to matters of political character—the motives of the offender and the motives of the requesting country.
Throughout our legal history, we have been just as much concerned about the motives of the offender in relation to political character as we have been about the motives of the requesting country. The earliest definition of the concept of exemption on the ground of political character, which has been authoritatively accepted, was given by Stephen in his History of the Criminal Law:
Foreign criminals are not to be surrendered for extradition crimes if those crimes were incidental to and formed a part of political disturbances.
That definition says nothing about the motives of the requesting country.
As time passed, we had the concept, as expressed in the case of Castioni, developing to take account of parties within a State. The definition adopted in Castioni's case—Mr. Justice Stephen was a member of the Divisional Court which adjudicated on that matter—was that an act of a political character was done—I am paraphrasing somewhat—if done
with the intention of assisting … a politial rising, or a Beat dispute between two parties in the State as to which is to have the government in its hands.
Again, one may think that there is no great emphasis there on the motives of requesting countries.
Cases were heard and definitions of that kind were adopted until we came to the Kolczynski case. Some members of the Committee may remember that that was the case of the Polish seamen on a Polish ship just after the war who mutinied and put into a British port seeking political asylum When they claimed political asylum, it was pointed out in response to a demand from Poland for their extradition, that when a one-party State is involved it is hard to put the case in the context of previous definitions of "political character".
That matter was summarised by Mr. Justice Chapman in a later case in these terms:
… even if one is not a member of a political party and even if one is not seeking to oust the governing body or to take over the government of the country, it may still be an offence of a political character if violent measures are taken to get away from a political ordering of society which is regarded as intolerable.
The leading case on this subject is that of Schtraks, the Israeli citizen whose extradition was sought by Israel on the charge of kidnapping a child in Israel. In that case the Law Lords set down what was perhaps the most authoritative modern ruling on the subject. Perhaps I may paraphrase that in these terms. The political character of an offence concerned a person who was at odds with the requesting country on some issue connected with the political control or government of the country, and the requesting State was after him for reasons other than enforcement of its ordinary criminal law.
There we have the insertion of the idea that the motive of the requesting country is important, though not the sole consideration to be applied, of course—not by any means.
More recently, in the case of Littlejohn, the Lord Chief Justice, Lord Widgery, having reviewed all the authorities as to what constituted an offence of a political character, said:
… an offence may be of a political character, either because the wrongdoer had some direct ulterior motive of a political kind when he committed the offence, or because the requesting state is anxious to obtain possession of the wrongdoer's person in order to punish him for his politics rather than for the simple criminal offence referred to in the extradition proceedings.
I conclude this section of my argument with a quotation from the current edition of Halsbury—the Fourth Edition, Volume 18, at paragraph 217:
There is no exhaustive definition of 'an offence of a political character'. The crime must be incidental to and form a part of a political upheaval, committed by the fugitive offender as part of an organised political party contending for power with the established government. The crime must connote opposition to the government of the requesting country on some issue connected with the political control of government of that, and no other, country.
It will be seen, therefore, that the authorities certainly recognise that the


motives of the requesting State are important and have a part to play in the consideration of whether an offender who claims political asylum is entitled to be exempted from extradition proceedings, but, clearly, that aspect is not decisive and the motive of the offender remains a matter which must be considered.
What we appear to be doing in this Bill is saying that it does not matter what the offender's motives are with regard to the cases to be covered by the Bill so long as he is not a political refugee according to the terms of the United Nations convention and some other international convention which is not at present a matter of domestic law in this country.
I respectfully suggest that we cannot proceed to change the concept of political character and the right of asylum in relation to extradition proceedings without much more detailed examination of the whole problem and knowledge on the part of the public generally as to what we are doing.
The origins of that concept lie in the history of the fight for political freedom not only in this country but elsewhere. The idea that persons who, having committed by the law of their own countries, a serious offence, and having escaped to this country should be returned to countries where there was oppression was so abhorrent to the British people that the concept was developed in the nineteenth century, and as a result people such as Garibaldi and Kossuth were able to enjoy its benefits in this country, notwithstanding that they had committed serious offences—and violent offences—against the law of their own countries. They were heroes to some and bloodthirsty tyrants to others.
The present situation in the Middle East is one which, in 50 years' time, we shall look back on with views rather different from those we have today. One might regard the Palestine Liberation Organisation as being very little different from the Irgun Zvei Leumi in the Middle East of 30 years ago. Indeed, in the perspective of history there is very little to choose between Mr. Begin and his opponents in the PLO. Yet, of course, one at the moment is the head of a democratic Government—the Government of a country which may be the

requesting country in some future extradition case—and the leader of the other is an international outlaw by some standards yet one who may be the apparently respectable leader of a democratic country in the future.
One has to beware of labelling things too simply in discussing matters of this kind. It must be remembered that the desire to recover lost territory can be a political motive, and violent offences committed with that aim in mind might well qualify as offences of a political character under our existing law.
That brings me to consider whether the Bill achieves, or even purports to achieve, what the hon. Lady stated as its purpose and effect. She laid great emphasis upon the political refugee, a concept not known to English law as such. Certainly, there is the benefit of the immigration laws for people who find themselves in this country with nowhere else to go and not necessarily entitled to be here, but political asylum is given to them because the Home Secretary, acting within his discretion, decides on political grounds that they may be allowed to remain.
But the basic expression of the right to political asylum in this country is contained in our extradition law and in the exemption from extradition proceedings of a person who is alleged to have committed a crime which he shows to have been of a political character.
It is no use quoting the United Nations Convention on the Status of Refugees as authority for saying "We are embodying that in our law, and therefore political refugees need have no fear", because, although we may have ratified it, it is not per se part of our law. No United Nations convention can be enforced in this country unless there is a domestic law to enforce it. Even then, it must go via the domestic law.
How far do we accept that, merely by inserting in this Bill provisions to safeguard the traditional international concept of the political refugee we are satisfying all legitimate concern and anxiety about diminishing political liberty?
The first thing to be said is that we have had these provisions in our law since 1967 in relation to the Commonwealth. The Fugitive Offenders Act 1967 incorporates all these high-flown words,


these protections, guarantees and safeguards against oppression by the requesting country. But—surprise, surprise—we have left "political character" in as well. It is not considered a substitute in the Fugitive Offenders Act. It did not drop "political character" in order to embody the definition of "political refugee" which is now being embodied by the Bill in other aspects of our extradition law.
One looks again, therefore, at just what the Bill is aiming at. As I have said, by its terms, although it gives power to the Secretary of State to extend it, it applies only to member States of the Council of Europe, of which there are 21, which have signed the treaty, of which there are 18, I think, and which have ratified it—so far, I think, only four—and which are bound to this country already by the terms of an extradition treaty, of which I think there are not more than half a dozen, except—I think that members of the Committee will agree with me that this is getting complicated—in the case of the two members States of the Council of Europe which are members of the Commonwealth, namely, Cyprus and Malta.
If one had any sort of reservations about the political inspiration of Governments of any of the States in the Commonwealth, among a short list one might include one or other of those two countries, yet those are the two countries, provided that they have ratified the treaty—I think that Cyprus certainly has—to which we shall be giving benefits by allowing them to have people who previously would have been accepted on the grounds of "political character", benefits which are not available to the rest of the Commonwealth or, indeed, to the great democracies such as the United States of America, Australia, Canada and New Zealand.
If one appreciates that fundamental defect in the Bill, as I believe it to be, one wonders whether we should be stampeded by the Council of Europe into making so fundamental a change in our extradition law, because of the background of political liberty which is involved.
The Council of Europe is a very august organisation, and it has produced many splendid proposals and suggestions in the

past for the solution of political problems, regardless, perhaps, of the legal consequences involved. I think, for example, of the difficulty which was referred to by my hon. and learned Friends the Members for Runcorn (Mr. Carlisle) and Darwen (Mr. Fletcher-Cooke) about Ireland. The Republic of Ireland is not co-operating with us at the moment in the matter of returning IRA members who are wanted for crimes committed in this country on the ground that they have committed political offences.
Why do we suffer so much in that respect? It is because Ireland has an extradition law which says that extradition will not be granted where the offence alleged is a political offence or an offence connected with a political offence. So the Irish go one stage further. In their Extradition Act of 1965 they exempt in relation to the United Kingdom not only political offences but offences connected with or related to political offences.
For example, George Blake, the spy, was assisted in his escape from Wormwood Scrubs prison by an Irishman who subsequently escaped to Ireland. That Irishman was sought by us, and his extradition was refused by the Irish courts on the ground that, although assisting someone to escape from a British prison was not a political offence, it was done in connection with a political offence, namely, spying and enabling a spy to escape.
Whence did the Irish get that extension to their extension to extradition?—nowhere else but the European Convention on Extradition, another proposal put up by the Council of Europe but which, happily, has not been ratified by this country so that we are not bound by the proposals in that convention. But the Irish had that wording in their 1965 Act, and they apply it, even though, strictly speaking, it is not reciprocal with our arrangements with them. So one has to be careful in that respect about political motives that change our law in fundamental respects.
Fundamentally, perhaps, my point is that, if a change is being made in that we are dropping exemption for offences of a political character and substituting exemption on the ground of race, religion, nationality or political opinions, what precisely are to be the categories of people who will not in future be able to benefit


from the exemption and who will be returned? It is important that the Committee and the public should know what sort of cases are involved.
There are at present a number of people who are, or have been, sought by their home countries for alleged offences. For example, we have in this country General Gowon, whose extradition to Nigeria has been refused, so one understands, though, as far as I know, the case never came before a court. Nobody doubts that Nigeria believes itself to be fully entitled to seek his extradition. He would not be prejudiced on account of his race, religion or nationality, and I doubt that he would be proceeded against for his political opinions if he were returned to Nigeria, because, as far as I am aware, he has not expressed any, being an intelligent person. It has been held that one must have expressed political opinions before it can be said that one might be prejudiced by them when one returned—as in the Teja case.
If one puts one's mind to it, one can think of many cases where persons in this country are sought by Governments with the purest of motives, simply on the application of their criminal law, but who, in the average man's mind, are deserving of political asylum and therefore of exemption from extradition.
There is the dangerous rival, for example, who has not committed any offence in fact but who may be so charged. One must take into account the possibility of bad faith on the part of the requesting country. He might have a charge trumped up against him, though he has done nothing. The hidden motive behind it all would be to get rid of him, or at least to render him harmless. In historical terms, one example would be a pretender to the Throne. Such a person might not have committed any offence, but the evidence of the offence may be produced or be manufactured by the requesting country. Milton Obote, for example, may well be sought by General Amin of Uganda.
To emphasise that I am not making any allegations against any past requesting country—certainly not Nigeria—or any possible future requesting country, I draw the attention of the Committee to the Eisler case just after the war. Mr. Eisler was taken off a Polish ship in British territorial waters on a claim by America

that he committed perjury, which was an extradition crime. Mr. Eisler was a Communist and had testified before a United States Congressional Committee, which excited a great deal of controversy in the United States, although he had been there for some time.
The alleged crime of perjury was based upon a false statement that he had made in order to obtain his exit visa. When Mr. Eisler was arrested and charged with the offence of perjury in this country, there was a rumpus in the House of Commons when it was pointed out that this was the clearest political offence that there could be. The United States Congress and the American Government simply wanted to get their hands on this person and return him to America.
The learned magistrate at Bow Street decided that the incorrect manner in which Mr. Eisler had completed his form of application for an exit visa was not such as would justify a charge of perjury in this country, where a false statement has to be made in connection with judicial proceedings.

Mr. Fletcher-Cooke: Whatever Eisler was, he was not a terrorist. What has this to do with terrorism?

Mr. Stanbrook: My hon. and learned Friend is illustrating admirably my concern that some of my colleagues, those most esteemed by me, are so obsessed with the need to put down terrorism that they are prepared to take liberties—if I may so express it—prepared to accept amendments to the laws governing political liberty in this country. Certainly Eisler was not accused of terrorism. He was accused of perjury. But perjury is an extradition crime, and terrorism, as covered by the various offences set out in the Bill, covers a wide range of offences. Indeed, Article 2 of the convention widens it even further. I shall come to that in a moment.
If we drop "political character" and go for "race, religion, nationality and political opinions", the difficulty will be that English courts are always reluctant to impute bad faith to the Government of a requesting country. They go by the letter of the law and the spirit of the law, which is trustful, and any request that may come from a country, especially one with which we have constitutional or historical bonds of friendship, will be


judged strictly in the light of the wording of the Act, without regard to the principles which used to animate our grant of political asylum in extradition proceedings.
Lord Justice Shaw, for example, in the recent case involving Mr. Tarling—it was reported in The Times the next day, in February this year—said that no imputation of partiality had been made against the Singapore Government: if it had been, the court would have rejected it, and quite properly so. That means that we must take into account that our judges are not politicians but lawyers expected to apply the law, to interpret it with common sense, bearing in mind their authority and experience and the spirit of the law. But it is always assumed by the courts in this country, as Lord Reid said in the Armah case, that requesting countries will honour their obligations.

The Chairman: May I call the hon. Gentleman's attention to the fact that this is a Second Reading Committee? While I am properly allowing him a very wide scope, many of the arguments he seems to be adducing are more suitable for the Committee stage of the Bill.

Mr. Stanbrook: Thank you, Mr. Blenkinsop, for calling that to my attention. I shall bear it in mind. But I am sure that you will bear in mind also that "political character" is of the essence in this debate. It is not a purely Committee point to say that we should not give the Bill a Second Reading because it deletes "political character" from the whole of our extradition law.

The Chairman: May I also call the hon. Gentleman's attention to the fact that we are not strictly giving the Bill its Second Reading. It is proposed that I report to the House that the Committee recommend that it ought to be read a Second time. That is a slightly different emphasis.

Mr. Stanbrook: Thank you, Mr. Blenkinsop; it is slightly different. What I am saying is that the main reason why you ought not so to report is that we are taking "political character" out of our extradition law by the Bill. That is an important general point of objection to the whole Bill, not against any particular clause or subsection.
I appreciate, Mr. Blenkinsop, that I have taken some time to make these points, but I believe that it is justified because no opposition to the Bill has been expressed inside Parliament so far. Perhaps I may crave your indulgence if I keep to the general points, especially on "political character".
The Times, for example, said that the Bill limits the generality with which courts grant extradition for offences of a political character, for political crimes. That is a good point, and I think it absolutely justified. It is not good enough for the hon. Lady to say that the Bill in no way derogates from our right to grant political asylum. We are talking not strictly about political asylum but about exemption from extradition on the ground of the political character of the offence.
I hope that I have shown—perhaps I have been unsuccessful—that we are ignoring the fact that half of a political offence is concerned with the motives of the offender. In this case, we are dropping that half completely for the future application of the law.
It is perfectly true, as the Minister said, that in 1969, for the first time in our history, we deleted the concept of political character from extradition proceedings in connection with the offence of genocide. That is an interesting example. It is the only offence so far in English law which merits consideration as an exemption from the general rule that political offences should be exempt.
The Genocide Convention was drawn up, I believe, in 1949. It was not until 1962—and that period includes the Labour Government of 1945–51—that any British Government considered ratifying that convention. When the Government of 1962 considered it, it was rejected. If it will not unduly delay our proceedings, I can quote what the then Lord Privy Seal my right hon. Friend the Member for Sidcup (Mr. Heath), said—

The Chairman: Order. I think that the hon. Gentleman is in danger of trying the Committee's patience a little by the detail into which he is going on the proposals regarding the Genocide Convention. We must stick fairly strictly to the broad principles. The extent to which the hon. Gentleman cites detailed examples must be limited.

Mr. Stanbrook: I shall abbreviate it, Mr. Blenkinsop, by saying that the Genocide Act did not pass in the House until 1969, 20 years after the convention. That reflected the grave concern of authorities in this country at dropping the exemption for offences of a political character.
It is significant, too, that the United States of America has still not ratified the Genocide Convention in its law for the same reason, namely, that the Americans do not like making exemptions for any particular offence from their general principle of political asylum.

Sir M. Havers: Perhaps my hon. Friend will assist the Committee by dealing with Schedule 1 and say which of the offences set out there are those in respect of which he would object to an extradition order being made.

Mr. Stanbrook: This is an interesting point, because the spirit behind it lies at the heart of what my right hon. and learned Friend has already said about the Bill. He is animated by the seriousness of these offences. It is true that those specified in Schedule 1 are all, apparently, very serious offences. But it appears from reading the small print—if one may call it that—that we are not always dealing with offences of terrorism per se, and also I do not believe that this should be considered in the light of particular offences which have been quoted.
This convention has been signed by a number of members of the Council of Europe—18, I think—but Article 13 allows for reservations to be made on signature and on ratification. That is rather interesting, because if the main purpose of the Bill is to drop exemption from extradition for political offences, one should look for reciprocity among other members of the Council of Europe which will benefit from our doing so.
On reading the list one sees that France, for example, has reserved its position in a long memorandum on page 8, saying
It is self-evident that efficiency in this struggle must be reconciled with respect for the fundamental principles of our criminal law and of our Constitution, whih states in its Preamble that 'Anyone persecuted on account of his action for the cause of liberty has the right to asylum on the territory of the Republic.

Italy has declared that the convention will not apply to political offences. Norway has declared that it will not apply, as have Portugal and Sweden. We are already finding, therefore, that what is left is very small indeed. Yet, in principle, for those of us who take all these things in good faith, it is very big indeed.
What is worse is that the British Government go further than they need. The convention provides for two scales of offences to be considered—first, Article 1, under which all those ratifying must provide for dropping the exemption for political offences and, second, Article 2, which is optional. As the hon. Lady said, the British Government have taken both into the ambit of the Bill and propose therefore to extend the exemption for political offences to cover offences covered by both those articles.
Here is, I hope, a very general fundamental point. The real problem we are dealing with here is that under our present extradition law the Secretary of State has no option but to grant asylum where the offence is found by a court to be of a political character. That, perhaps, is the weakness of our present extradition law in relation to crimes committed by terrorists. It seems that this Government have been stampeded into altering a law affecting our fundamental liberties and restricting the right of asylum when the purpose could be achieved by the Secretary of State's not being obliged to grant asylum even if the court finds that the ingredients of an offence of a political character have been made up.
I suggest, therefore, that the problem should be dealt with by giving the Secretary of State a discretion and not by abandoning the concept of offences of a political character. It must be remembered that the Fugitive Offenders Act 1881, which preceded the Act of 1967, did not include within it offence of a political character.
As the hon. Lady said, there are some States with which we are on such good terms that in a proper case we would not dream of refusing to them the extradition of offenders who come to this country. The principles of the 1881 Act in relation to the Commonwealth were those of trust. The only restriction of this kind was that there should be no return


where such return would be unjust or oppressive. One might say that that is covered by the present concept of political refugees which the hon. Lady quoted today. But until 1967 "political character" did not apply.
I refer members of the Committee to the case of Anthony Enahoro. It is a case that will be well known to Members of the House, because it excited a great deal of controversy when it occurred in about 1962. Anthony Enahoro was wanted by Nigeria, then a fully democratic and parliamentary country with a system of courts based on our own and staffed, to a great extent, by people trained in this country. Anthony Enahoro was charged with offences which basically involved raising and training a rebel army.
It is, perhaps, difficult to imagine a more political offence. However, he was extradited—there was nothing in the Act to prevent it. It would not have been unjust or oppressive for this country to have returned him. Indeed, it did so order that he should be returned, because it was known that he would get a fair trial in Nigeria, which he received, and he survived to be a Minister in a later administration.
That caused a trauma, not only in this place, in discussion as to whether Mr. Enahoro should go back. My hon. Friend, who is now the Member for Warwick and Leamington (Mr. Smith) but who was then the Member for Brentford and Chiswick and Mr. Enahoro's constituency Member, worked very hard on his behalf and will be particularly aware of the case.
One might have said that the offence on which Mr. Enahoro was sent back was political. Therefore, in 1967 that case was one of the reasons why "political character" was added to the Fugitive Offenders Act. That means that the Government then acknowledged that political refuge was not sufficient in the terms of the old definition but that it was necessary to insert the new provisions.
I can see, Mr. Blenkinsop, that you are getting impatient, so I shall turn to the next aspect of what I was saying the Bill was about.

The Chairman: It is important to remember that the Committee will want to come to some conclusion this morning.

Mr. Stanbrook: That is all very well, if I may say so, Mr. Blenkinsop. But if the Committee does not come to a conclusion this morning it will not be because I have been out of order. With respect, I am discussing the Bill. It is fundamentally a most important Bill and the problems arising thereon ought to be aired. I do not think that I have yet given cause for the Committee to devote a second sitting to the matter and I hope that I shall not be responsible for that.
The second aspect that I wanted to talk about is the fact that it is adding offences to the list of extradition crimes. That is one of its other purposes besides changing the operation of exemption for offences of a political character.
That leads me to ask why some offences have been included in that part of the Bill which are eminently desirable while others have been excluded. For example, conspiracy appears in only two cases in the Extradition Acts—murder and drug offences—but everywhere in the Fugitive Offenders Act. Why was not the opportunity taken to make the list of extraditable offences the same, whether for the Extradition Acts or for the Fugitive Offenders Act 1967? In both cases there is a schedule. Surely, if we are to alter our extardition law, we should take advantage of the opportunity of a Bill coming which seeks to alter our extradition law.
I say that it is making the matter more complicated. Surely, we should take advantage of the opportunity to make it simpler and at least to standardise our approach for extradition purposes to that of foreign States as well as to that of Commonwealth States. At the moment those two lists are different: some offences are included in the one but not in the other, and vice versa.
As regards Ireland, the Backing of Warrants (Republic of Ireland) Act 1965 has a different concept entirely on indictable offences. But in that measure there is a significant change in the wording. Hon. Members will see in the Bill that when we alter the Extradition Acts in relation to the convention countries, we speak of the possibility that the returned offender might be persecuted. But when we alter the Backing of Warrants Act we say that the offender would be persecuted. There is a significant difference in law


between those two terms, as has been held in a number of cases before now.
The Government should give consideration to this, because if it is a benefit that we are giving to the Irish offenders then, surely, we should extend it to all other offenders. Why should there be any advantage—or, indeed, disadvantage—for one that is not available for the others?
I suggest that we should include in the Bill any offence which is extraditable by the laws of both countries. We do that at the moment in 24 out of 44 treaties which apply to us. We do not seem to do that for the rest and we do not do it for fugitive offenders under the Fugitive Offenders Act.
I turn now to a third aspect of the whole Bill in the scheme which I outlined when I rose. I welcome the extraterritorial jurisdiction provisions. They form a part of the Bill that is helpful and will enable the extradition law to be rationalised and conducted in the courts more sensibly. It will lead to some difficulties in that, by dropping the political character for some people and not for others, we may have some difficulties in our courts in matters of evidence, and so on. We say that evidence may not be taken in this country if the matter refers to an offence committed abroad which is a political offence. With regard to some countries in the future that will not apply because they will be covered by the Bill, and in others it will apply. More rationalisation is needed there.
I am glad to see also that, in spite of the wording of the convention, we can prosecute for an offence covered by the jurisdiction conferred by the Bill, whether we refuse extradition or not. So it may not always be necessary to wait for a request from another country to put it through our courts and then to refuse it on the ground, say, of political opinions. We could prosecute in this country with the offender here and with the assistance of evidence supplied from abroad.
I believe that that part of the Bill is useful. In the long run it is, perhaps, the real answer to problems of this kind. We shall always have reservations about when and to whom we should extradite persons who commit offences for politi

cal motives. It is not the fault of legal drafting in the Bill because I think that the drafting is excellent. It is simply the political inspiration which is causing the trouble. We shall always have these difficulties, but if we can get round them by conferring jurisdiction on our courts I think that we shall have solved a problem which is causing concern.
Perhaps I may now summarise my attitude to the Bill. First, I believe that we should not ratify the convention until or unless we place a reservation upon our ratification so that we keep the notion of offences of a political character in addition to the safeguards which are being imported into the Bill and which are already present in the Fugitive Offenders Act. In other words, we should apply to everybody what we now apply to the Commonwealth.
Secondly, we should use the provisions for extra-territorial jurisdiction of these courts over terrorist offences to the full.
Thirdly, if, as it is apparent that most people seem to want, we want a political solution to this problem, I suggest we should not be seeking to achieve it by changing the concept of "political character". We should be taking political action against the offenders and against those who harbour offenders. That means refusing landing rights to State airlines of countries which do not observe the terms of the Hague and Montreal conventions. I believe that is the only effective sanction in future. It is a political solution to the problem and one which I believe is appropriate. But what we should not do is build up a hornet's nest around an already complicated law of extradition.

Dr. Summerskill: rose—

The Chairman: May I point out that second speeches in a Second Reading Committee can be made only with the consent of the Committee.

12.16 p.m.

Dr. Summerskill: By leave of the Committee, perhaps I may reply to the debate. Other hon. Members who have spoken in this debate had the advantage, I suppose, of speaking before the hon. Member for Orpington (Mr. Stanbrook) and therefore did not feel obliged either to agree or to disagree with the many points that he made.
The hon. Member made a very detailed speech which I shall read and study carefully, as I am sure will all members of the Committee, whenever we actually get it in printed form. However, I should like now to take up a few of the points that have been made in the general debate and which are factual.
I welcome the general support that the measure has received. The exception is the hon. Member for Orpington, although the hon. and learned Member for South Fylde (Mr. Gardner) would have liked more to be done to suppress terrorism than is being done in the Bill, but this measure is worthy of the support of all of us.
I was asked why the opportunity has not been taken to list the offences under the Fugitive Offenders Act and the Extradition Act in the same way. The Bill is restricted to the terms of the convention, upon which it is based.
So we have made extraditable those offences under the convention which are not already extraditable—that is, offences under the Offences against the Person Act, the Firearms Act and the Explosive Substances Act, and attempts to commit such offences.
Within the limits of the Bill, therefore, we have taken the opportunity to make all indictable offences under those two Acts extraditable and all attempts to commit extraditable offences. Conspiracies are not covered in the convention, and therefore we could not justify including them in the Bill.
The general theme of the hon. Member for Orpington was that the Bill deletes the political character of the offence from the whole context of extradition law. To attempt to answer the hon. Gentleman's long speech in a sentence, I would say that it is true in relation to the very serious offences covered by the Bill which are of a terrorist nature—and which I sense, from the response of the rest of the Committee, that we are desperately anxious to do something to avoid—and only in respect of contracting States. It does not have such a generalised effect as the hon. Member for Orpington has alleged.
The hon. Gentleman was right in saying that some countries have reservations

under the convention. We have not. We would rather that other countries did not, but we do not insist on absolute reciprocity. We will be prepared to extradite fugitives to those countries in circumstances where those countries might not be prepared to extradite fugitives to us, but we believe that extradition is the most effective way of ensuring that terrorists are brought to justice and we do not want to increase barriers to extradition even if other States do so.
The hon. and learned Member for South Fylde is not here, but perhaps he will read my reply. Other hon. Members, too, will be interested to learn, on the question of the general measures that other countries are taking, that we have consistently urged other Governments to become parties to the Tokyo, Hague and Montreal conventions because we believe that international collaboration is essential in combating hijacking and other forms of international terrorism. We strongly supported the United Nations General Assembly resolution adopted by consensus on 3rd November last which called on all States which had not already done so to become parties to those three conventions. There are encouraging signs that the number of Governments prepared now to give a haven to hijackers is dwindling. I think that the efforts of the United Nations can only be helpful in that regard.
The hon. and learned Members for Darwen (Mr. Fletcher-Cooke) and for Runcorn (Mr. Carlisle) raised the question of the Republic of Ireland, about which I know that many people are concerned. We very much hope that the Republic of Ireland will become a party to the convention, and we have made our views known to the present Government of the Republic. We have made it clear that we disagree with the view that customary international law does not allow the extradition of political offenders. We should wish to see the Republic sign and ratify the convention without reservation and implement it in the same comprehensive way as the United Kingdom. Only in this way could we ensure that fugitive terrorist suspects could no longer avoid extradition from the Republic by pleading that the offence involved was political.
We have made appropriate provision in the Bill to enable it to be applied to


the Republic as soon as the Republic ratifies the convention. We have also provided for the application of some of the Bill's provisions to the Republic of Ireland even if the Republic is not a party to the convention, in case the Republic were willing to participate in an agreement outside the convention but on similar lines. Discussions are at present taking place in the EEC about the possibility of concluding such an agreement between the Republic and the rest of the Nine.
There is, of course, already available the reciprocal criminal jurisdiction legislation—embodied in the Criminal Jurisdiction Act 1975—which enables the courts in the Republic to try offenders for crimes committed in Northern Ireland and vice versa. This legislation applies to a wide range of offences committed by terrorists after 1st June 1976.

Mr. Carlisle: Am I right in thinking that that Act is limited to acts of terrorism committed within Northern Ireland? Does it cover acts of terrorism committed, for example, in this country by members of the IRA for a political purpose?

Dr. Summerskill: As I understand it, it enables courts in the Republic to try offenders for crimes committed in Northern Ireland, and the courts in Northern Ireland to try offenders for crimes committed in the Republic.

Mr. Carlisle: Therefore, I am right in saying that there is a right to try in the courts of Southern Ireland offences, for example, committed either in Birmingham or London by IRA members in this country.

Dr. Summerskill: I think that "No" is the answer to that question. It has serious limitations.
I should like to take up some other points made by the hon. Member for Orpington. We have extradition arrangements with all members of the Council of Europe except Turkey, either in the form of treaties with foreign States or in the form of reciprocal legislation for Commonwealth countries. The provisions

Division No. 1]
AYES



Bates, Mr. Alf
Havers, Sir Michael
Parry, Mr. Robert


Carlisle, Mr. Mark
Orbach, Mr. Maurice
Summerskill, Dr. Shirley


Gardner Mr. Edward

of the Bill can be applied to a non-convention country under Clause 5 only if the United Kingdom already has extradition arrangements with that country. It is not the case that the Bill can be applied to any country in the world, as I think the hon. Gentleman might inadvertently have said.

The hon. and learned Member for Runcorn was worried about the words of Clause 2—no doubt we could look at those in more detail in Committee—and asked whether they detract from Clause 1. The provision in Clause 2 is modelled on the provision in the Fugitive Offenders Act which is itself based on a similar provision in the European convention on extradition. The words would appear to come from there. It is relevant that the offence of a fugitive, in order to be covered by the Bill, must be an offence of violence, and basically Clause 2 ensures that the fugitive will not be sent back if there is any reason to suppose that he will not get a fair trial. Obviously, we can look at that in Committee.

One final point raised by the hon. Member for Orpington and the hon. and learned Member for South Fylde concerned the political safeguards that I mentioned in my speech. There are two limbs to the political safeguard. One limb relates to the character of the offence. This is the safeguard removed by the Bill in relation to the Extradition Act, the Fugitive Offenders Act and the Backing of Warrants (Republic of Ireland) Act. The other limb relates to the motive for the request for extradition. It is this safeguard that ensures that the fugitive is not extradited if he is likely to suffer on the grounds of his political opinions. It is this that is considered to be the greatest protection and to be most relevant to the political refugee.

I am sure that the Committee stage will be most interesting and, I hope, not too lengthy. I am glad that the Committee generally welcomes this essential piece of legislation.

Question put:—

The Committee divided: Ayes 7, Noes 1.

NOES



Stanbrook, Mr. Ivor

Question accordingly agreed to.

Ordered,
That the Chairman do now report to the House that the Committee recommend that the


THE FOLLOWING MEMBERS ATTENDED THE COMMITTEE:


Blenkinsop, Mr. Arthur (Chairman)
Hutchison, Mr. Clark


Bates, Mr.
Mather, Mr.


Carlisle, Mr.
Orbach, Mr.


Fletcher-Cooke, Mr.
Parry, Mr.


Gardner, Mr Edward
Stanbrook, Mr.


Havers, Sir M.
Summerskill, Dr.

Suppression of Terrorism Bill [Lords] ought to be read a Second time.

Committee rose at twenty-nine minutes past Twelve o'clock.